The Union government on Monday said the Central Bureau of Investigation (CBI) has already registered a case in the National Stock Exchange (NSE) co-location (Colo) scam and the investigation on going on.
In a written reply in the Lok Sabha, Pankaj Chaudhary, minister of state for finance said, “CBI has registered a case in the matter of preferential access at the co-location facility of NSE, vide RC No.AC I 2018A0011 dated 28 May 2018, under section 120B & 204 of Indian Penal Code, sections 7, 12 & 13 (2) read with 13(1) (d) of Prevention of Corruption Act, 1988 and under section 66 of Information Technology Act, 2000. Presently, the case is under investigation.”
Arvind Ganpat Sawant, a member of Parliament (MP) from Mumbai had asked the minister of finance to share details of progress of CBI’s first information report (FIR) registered against NSE in the Rs75,000-crore Colo scam.
Mr Sawant, a leader of Shiv Sena, also asked for the details of the market regulator—Securities and Exchange Board of India (SEBI)’s planned actions against the NSE management and Karvy Stock Broking Ltd (KSBL) management in Rs2,500 crore Karvy scam in which several lakh customers have not yet received their money along with the timelines for expected action.
Mr Chaudhary, the minister, replied saying, “SEBI has already passed orders in the matter of Karvy Stock Broking and initiated action against directors and key management personnel (KMP) of KSBL. In addition, adjudication proceedings have been initiated against both NSE and BSE for violating provisions of SEBI circulars. This is in addition to the criminal complaints filed by the NSE and its declaration of the broker as a defaulter. Claims of investors have been invited through a public notice.”
Mr Sawant questioned about the actions to be taken by SEBI against NSE management and broker in Rs1,000 crore BMA Wealth Kreators Ltd (BRH) case along with the expected timelines and also the actions which SEBI plans to take against NSE management and owners of Anugrah Stock & Broking Ltd in the Rs1,200 crore scam.
Responding to the question, Mr Chaudhary said, “SEBI has already passed orders in the matter of BRH Wealth Kreators (formerly BMA Wealth Creators Ltd) and against HDFC Bank Ltd in the matter. Further, SEBI has initiated enforcement proceedings against BRH, BRH Commodities Pvt Ltd (BRHCPL), their KMPs and related entities as well as approved filing prosecution against BRH, BRHCPL and their KMPs for mis-utilisation of funds and securities of clients, diversion of funds and non-cooperation. This is in addition to the criminal complaints filed by NSE and its declaration of the broker as a defaulter. Claims of investors have been invited through a public notice.”
He added that SEBI has already passed an order in the matter of Anugrah Stock & Broking and initiated enforcement proceedings against ASBPL, its related entities and their KMPs.
“Application for prosecution has been filed against aforesaid entities, for engaging in derivative advisory services in portfolio management services promising assured returns without seeking registration under relevant SEBI Regulations. This is in addition to the criminal complaints filed by NSE and its declaration of the broker as a defaulter. Claims of investors have been invited through a public notice,” the minister added.