 "Anjani Sinha & the art of shutting down exchanges")
The law of the land has somehow been very slow in catching up with the National Spot Exchange (NSEL) scam. Especially, if one compares it with the zeal with which the state machinery acted in the case in which Satyam Computers’ Ramalinga Raju was arrested. Raju got 48 hours after his confession, which was then criticised as too much leeway shown by the authorities.
Anjani Sinha, the former managing director of NSEL, made an out of turn confession saying he was solely responsible for all the affairs of the beleaguered exchange in the second week of August. We are in September now. To supplement the confession, the exchange also is said to have named him in complaints.
Yet the law is taking its own sweet time. But, with Sinha law has always taken its own sweet time. In fact, if at all any action transpires against him, it can be considered super quick.
In a letter written in response to a profile of Sinha published by this paper following the confession, Kolkata-based stock broker Ratan Lal Agarwala writes during the tenure of Sinha as the chief general manager and chief executive of Magadh Stock Exchange (MSE), there were several irregularities in the dealings of physical shares.
Agarwala, who was dealing on behalf of institutions such as UTI and State Bank of India, himself was a victim of bad deliveries and said the total size of the scam was about Rs 200 crore, two decades ago.
He added, “Anjani Sinha, who was at the helm of affairs of the exchange, had done absolutely nothing to rectify/replace the bad delivery of shares against the security/margin of the defaulting introducing members of MSE. Neither did he file any FIR or criminal proceedings against the defaulting members for introducing stolen, forged and fake shares...All these had resulted in payment crisis and eventual failure of the MSE.”
The Securities and Exchange Board of India (Sebi) superseded the board of the exchange. But it could not recover anything to repay the victims. Sinha walked away to take up managerial positions elsewhere. An email sent to Anjani Sinha seeking details about his tenure in MSE and the subsequent legal proceedings initiated by brokers against him and the exchange in Calcutta High Court remained unanswered.
Few days after Agarwala’s mail, a Mumbai-based market participant called to say Sinha was involved in a similar physical shares induced payment crisis in the Ahmadabad Stock Exchange, where he was at the helm.
A September 2002 Times of India report quoted Sinha saying that an emergency meeting of the bourse’s governing board was called to discuss a showcause notice from Sebi for failure to curb certain illegal transactions.
Sebi superseded this board, too, and the result was the same: money is gone; investors left with case papers.
What is surprising is how did regulators such as Sebi and Forward Markets Commission allow a person with such a track record remain in the system. Months after Ahmadabad crisis, Sinha went on to get board positions in the Multi Commodity Exchange (MCX).
What kind of checks did the boards of MCX and later Financial Technologies do before allowing him to handle public money of such proportions.
Agarwala writes, “An independent enquiry is also needed as to how Mr Anjani Sinha got the coveted post of MD & CEO of NSEL and as Director, MCX, and how he managed clean chit from necessary quarters (read Sebi/FMC/govt) before his appointment to such a post.” I agree.
Anjani Sinha, the former managing director of NSEL, made an out of turn confession saying he was solely responsible for all the affairs of the beleaguered exchange in the second week of August. We are in September now. To supplement the confession, the exchange also is said to have named him in complaints.
Yet the law is taking its own sweet time. But, with Sinha law has always taken its own sweet time. In fact, if at all any action transpires against him, it can be considered super quick.
In a letter written in response to a profile of Sinha published by this paper following the confession, Kolkata-based stock broker Ratan Lal Agarwala writes during the tenure of Sinha as the chief general manager and chief executive of Magadh Stock Exchange (MSE), there were several irregularities in the dealings of physical shares.
Agarwala, who was dealing on behalf of institutions such as UTI and State Bank of India, himself was a victim of bad deliveries and said the total size of the scam was about Rs 200 crore, two decades ago.
He added, “Anjani Sinha, who was at the helm of affairs of the exchange, had done absolutely nothing to rectify/replace the bad delivery of shares against the security/margin of the defaulting introducing members of MSE. Neither did he file any FIR or criminal proceedings against the defaulting members for introducing stolen, forged and fake shares...All these had resulted in payment crisis and eventual failure of the MSE.”
The Securities and Exchange Board of India (Sebi) superseded the board of the exchange. But it could not recover anything to repay the victims. Sinha walked away to take up managerial positions elsewhere. An email sent to Anjani Sinha seeking details about his tenure in MSE and the subsequent legal proceedings initiated by brokers against him and the exchange in Calcutta High Court remained unanswered.
Few days after Agarwala’s mail, a Mumbai-based market participant called to say Sinha was involved in a similar physical shares induced payment crisis in the Ahmadabad Stock Exchange, where he was at the helm.
A September 2002 Times of India report quoted Sinha saying that an emergency meeting of the bourse’s governing board was called to discuss a showcause notice from Sebi for failure to curb certain illegal transactions.
Sebi superseded this board, too, and the result was the same: money is gone; investors left with case papers.
What is surprising is how did regulators such as Sebi and Forward Markets Commission allow a person with such a track record remain in the system. Months after Ahmadabad crisis, Sinha went on to get board positions in the Multi Commodity Exchange (MCX).
What kind of checks did the boards of MCX and later Financial Technologies do before allowing him to handle public money of such proportions.
Agarwala writes, “An independent enquiry is also needed as to how Mr Anjani Sinha got the coveted post of MD & CEO of NSEL and as Director, MCX, and how he managed clean chit from necessary quarters (read Sebi/FMC/govt) before his appointment to such a post.” I agree.