The Central Bureau of Investigation (CBI) has registered a case against one former and three serving senior Securities and Exchange Board of India (SEBI) officials along with Jignesh Shah and others for allegedly granting extension to the recognition of MCX Stock Exchange.
“The accused officials named in the case are: S. V. Murlidhar Rao, at present a SEBI Executive Director; Rajesh Dangeti, now a Deputy General Manager and Vishakha More, who is now holding the post of Assistant General Manager. Former Executive Director J. N. Gupta has also been made an accused,” said a CBI official.
Three of the entities associated with Mr. Shah — MCX, MCX SX and FTIL — have also been named in the First Information Report registered under various provisions of the Indian Penal Code and the Prevention of Corruption Act.
The case has been registered on the basis of findings of a Preliminary Enquiry registered earlier this year.
“Investigations revealed that promoters of the stock exchange had earlier entered into a buyback arrangement with a nationalised bank. This was in violation of the Securities Contract Regulation Act and the Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Shareholdings in Recognized Stock Exchanges) Regulation,” said the official.
However, the accused deliberately suppressed these facts in connivance with SEBI officials.
“They deliberately suppressed it while applying for the extension of recognition to the stock exchange, for conducting trade in currency derivatives. This is how, they allegedly fraudulently obtained the extension in 2009 by cheating SEBI,” said the official.
According to the CBI case, the then accused SEBI officials deliberately did not issue a notice to the stock exchange for cancellation of its recognition in the currency derivatives, when SEBI had already rejected the request of the same stock exchange for trading in other segments.
