Market watchdog Securities and Exchange Board of India [ Images ] has sought the government's permission to tap phones during its probe into suspected financial irregularities in its third such request in less than three years.
The latest request has been made by Sebi chairman U K Sinha after his predecessor C B Bhave failed at least twice in his attempts to secure an authorisation for Sebi to tap phone for its surveillance and investigative actions.
In his letter addressed to Economic Affairs Secretary R Gopalan, Sebi chief has emphasised the need for the market regulator to be authorised to tap phones of entities suspected to be involved in various market manipulation cases.
The Department of Economic Affairs is the finance ministry division responsible for policy measures for regulation and development of the securities market and investor protection. Sources said that Sinha, who assumed charge as Sebi chairman in February, has also raised the issue during his recent meetings with the top finance ministry officials.
However, Sebi stands little chance to get a blanket permission for phone tapping as a government-appointed panel has as such suggested tightening norms for agencies allowed to intercept telephonic conversations, sources said.
They added that Sebi should bring on board already authorised agencies whenever it feels the need for phone tapping, or it should seek permission on case-to-case basis.
The agencies allowed to tap phones include CBI, IB, Enforcement Directorate, Directorate of Revenue Intelligence and Central Board of Direct Taxes.
These agencies are authorised to tap phone conversations in their investigations and surveillance actions and Sebi has requested such powers several times over many past years.
However, all its requests have been turned down so far.
In 2009, the Sebi had also sought phone-tapping permission from the Department of Telecommunications, but was told that the market regulator was not authorised to tap phones.
Later in 2010, Sebi again asked the government to allow it to intercept call records of certain individuals in connection with its probe into stock market manipulations, but it was also turned down early this year.
It has been said that various enforcement agencies together tap about 6,000-8,000 telephonic conversations at any given time on an average, but only a small percentage of that is for corporate or white-collar investigations.
Sebi has used call records in its probes in the past, but those intercepted details were collected by tax authorities or other enforcement agencies.
Sebi is passed on the call records in cases where other agencies fall upon information suggesting market-related offences.