Mumbai, July 20: The presiding officer of Securities and Appellate Tribunal (SAT), Kumar Rajratnam, wants to opt out of hearings in the appeal filed by UBS against the Securities and Exchange Board of India (Sebi).

Rajratnam is believed to have been pained by the remarks of Sebi lawyer Rohit Kapadia, who is reported to have indicated that his client was not interested in SAT’s suggestion to consider plea bargaining in the UBS case. However, it is learnt that Rajratnam has convinced his fellow members in the tribunal, Chandan Bhattacharya and R. N. Bharadwaj to continue to hear the case.

On Monday, the tribunal sent indications that Sebi should consider plea bargaining and a penalty of Rs 50 crore on UBS Securities Asia Ltd, a foreign institutional investor forbidden from issuing participatory notes for a year. The forum that considers appeals against orders issued by Sebi said the move would stem endless litigation.

Under plea bargaining, a defendant agrees to accept guilt for the smaller charges made against it, while the prosecutor drops the serious accusations. All offences committed by the firm are compounded in the process, which is popular in the US and other developed markets.

Rajaratnam, while hearing UBS Asia’s appeal, said the market regulator could consider a “process similar to plea bargaining” as an innovative step to put an end to endless litigation. The suggestion came at a time when the Centre appears to have softened its stand on the mayhem of May 17, 2004, when the sensex crashed 568 points.

In recent weeks, finance minister P. Chidambaram has also conceded that he had not found any “major manipulation” on May 17, 2004. Barring one or two entities, he said the “rest acted out of genuine apprehension”.

The regulator picked UBS after finding proof that it failed to discharge obligations on regulatory counts. It was also charged with withholding critical information in a way that hampered probe. On May 17 this year, Sebi barred the firm from issuing participatory notes (offshore derivative instruments) with underlying Indian securities for a year.

UBS allowed its clients to invest in India through participatory notes ? instruments that enable foreign investors not registered with Sebi to buy shares here. Brokerages send dividends and capital gains to these investors, most of whom funnel their money through tax havens such as Mauritius.