The probe into the Rs 5500 crore-National Spot Exchange scam has taken a curious twist with the CBI registering a preliminary enquiry against former Sebi chief CB Bhave and former Sebi member KM Abraham.
CBI is probing the regulator's decision to approve MCX-SX (the currency and equity trading platform of MCX) in 2008 and renew recognition in 2009 and 2010. Ironically, it was during Bhave's tenure that Sebi was dragged to court by MCX-SX over delay in granting approval to the bourse's equity trading platform.
Sebi refused approval on the grounds that the promoters of MCX-SX had used dubious methods to reduce their holdings in the bourse to comply with the regulations.
In a letter to the Prime Minister's Office, Abraham had alleged that he was under pressure from the Finance Ministry to go slow on some of the high profile cases, MCX being one of them.
Where probably Bhave and Abraham might find themselves on a sticky wicket is their decision to allow MCX-SX's currency derivative platform to continue operations, while denying approval to the equity platform on the grounds that the conduct of the MCX-SX and its promoters “lacked honesty” and so they were not “fit and proper for the grant of the application".
The obvious question here, how could the same regulator have different views on the currency and the equity operations of MCX-SX if the promoters were dishonest.
Yet, if the CBI is widening the scope of its investigation beyond the money trail in NSEL, it should also look into why Sebi in September last year renewed recognition to MCX-SX for one year even though news of the murky dealings at NSEL had become public.
Just two weeks after Sebi's approval, the Forward Markets Commission slapped a show cause notice on Jignesh Shah and his company Financial Technologies as to why they should not be declared “not fit and proper” to be part of a bourse.
There are some other intriguing angles to the probe as well. Reports say the CBI recovered Rs 36 lakh from the search at sacked NSEL CEO Anjani Sinha's residence yesterday. But then, Sinha's residence had been searched by the Economic Offences Wing (EOW) in October last year, and his bank accounts frozen. How come the EOW failed to recover such a large stash of cash from Sinha's residence?
CBI may be well within its right to widen the scope of the investigation. But the bigger questions right now are: where has the money gone to and how soon can the investors hope to recover it?
No comments:
Post a Comment