{"id":5139,"date":"2019-12-12T11:55:23","date_gmt":"2019-12-12T06:25:23","guid":{"rendered":"https:\/\/triumphias.com\/blog\/?p=5139"},"modified":"2019-12-12T11:55:23","modified_gmt":"2019-12-12T06:25:23","slug":"stats-of-whistleblower-protection-laws-in-india","status":"publish","type":"post","link":"https:\/\/triumphias.com\/blog\/stats-of-whistleblower-protection-laws-in-india\/","title":{"rendered":"Stats of Whistleblower protection laws in India"},"content":{"rendered":"<p><strong>Relevance: Mains: G.S paper III: Economy\u00a0<\/strong><\/p>\n<p><strong>Why in news?<\/strong><\/p>\n<p><strong>Context:<\/strong><\/p>\n<ul>\n<li>The Securities Exchange Board of India (SEBI) has informed the public that it will henceforth entertain complaints against market participants only if the whistleblower is reachable to substantiate allegations and provides supporting documents.<br \/>\n\u2022 It has also said that complaints made to it must be from an identified source.<br \/>\n\u2022 One understands SEBI\u2019s angst in the MCX case, where after making allegations about funds diversion and other unfair practices, the complainant stonewalled all efforts to reach out to him by providing fake contact details.<\/li>\n<\/ul>\n<p><strong>News in detail<\/strong><\/p>\n<ul>\n<li>The case highlights how frivolous whistleblowing can not only waste the regulator\u2019s investigative capacity and time, but also inflict damage on investors by facilitating stock price manipulation by unscrupulous elements.<br \/>\n\u2022 But if anonymous whistleblowing provides a potent platform for disgruntled employees or competitors to undermine a genuine business, it has also set Indian regulators on the trail of many corporate misdoings in the past.<br \/>\n\u2022 The NSE co-location controversy and the related party lending at ICICI Bank came to light after such complaints.<br \/>\n\u2022 Therefore, while SEBI or other regulators may be right in insisting that whistleblowers remain accessible, it would be unfair to summarily dismiss anonymous complaints per se.<\/li>\n<\/ul>\n<p><strong>Whistleblower protection laws in India:<\/strong><\/p>\n<ul>\n<li>Whistleblower protection laws in India are at a nascent stage.<br \/>\n\u2022 The omnibus law, supposed to ensure immunity for complainants who act in public interest, remains in limbo after the amended Whistleblowers Protection Bill of 2015 was never operationalised.<br \/>\n\u2022 For corporate, the amended Companies Act of 2013 requires all listed companies dealing with public money to establish a vigil mechanism, but stops short of specifying any timeline by which such complaints must be resolved.<br \/>\n\u2022 SEBI\u2019s listing obligations and disclosure regulations require audit committees to vet such complaints, but again leave the procedure open-ended.<br \/>\n\u2022 Under extant laws, whistleblower complaints about companies are supposed to be first escalated to company boards and internal audit committees.<br \/>\n\u2022 But these are manned by independent directors, who are often known to be complicit with the management and wary of rocking the boat.<br \/>\n\u2022 In such circumstances, corporate insiders filing complaints stand a real chance of being both ignored and victimised.<br \/>\n\u2022 This legal ambiguity about the status of whistleblowers makes anonymous complaints the default choice even for bona fide insiders looking to expose corporate malpractices.<\/li>\n<\/ul>\n<p><strong>Way ahead:<\/strong><\/p>\n<ul>\n<li>If SEBI is keen to weed out malicious complaints masquerading as whistle blowing.<br \/>\n\u2022 It must bat for a stronger protection framework and perhaps set up a whistleblower\u2019s office under its direct aegis, so that complainants can bypass in-house committees.<br \/>\n\u2022 It may also have to build in-house capacity to investigate a large volume of complaints, so that undue stock price impact can be contained.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Relevance: Mains: G.S paper III: Economy\u00a0 Why in news? Context: The Securities Exchange Board of India (SEBI) has informed the<\/p>\n","protected":false},"author":1,"featured_media":3299,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[123,42,43],"tags":[392],"class_list":["post-5139","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-current-affairs","category-general-studies-iii-technology-economic-development-bio-diversity-environment-security-and-disaster-management","category-indian-economy","tag-union-public-service-commission-upsc"],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/5139","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/comments?post=5139"}],"version-history":[{"count":1,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/5139\/revisions"}],"predecessor-version":[{"id":5140,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/posts\/5139\/revisions\/5140"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media\/3299"}],"wp:attachment":[{"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/media?parent=5139"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/categories?post=5139"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/triumphias.com\/blog\/wp-json\/wp\/v2\/tags?post=5139"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}