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The Central Bureau of Investigation’s preliminary enquiry (PE) into the MCX Stock Exchange (MCX-SX) licence grant has reached the Securities and Exchange Board of India (Sebi).
Sources said the investigating agency visited Sebi headquarters earlier this month. It has also begun questioning current and former senior officials to check for possible irregularities while sanctioning the Jignesh Shah-founded bourse. A first round of questioning was done of former Sebi chief C B Bhave and former wholetime member K M Abraham.
Abraham had in a statement filed with CBI questioned it on the grounds on which a PE was registered (this was done in March). “Gradually, this PE will only let a deep and morbid fear permeate into these officers that will, overtime, sap the marrow out of them,” said Abraham in a 25-page statement to CBI. He has said he would not respond to questions that do not have a bearing on whether he committed an offence under the Prevention of Corruption Act. And, questioned the linking of MCX-SX with the scam-hit National Spot Exchange (NSEL).
“The current Sebi chairman has gone on record to state that MCX-SX is ring-fenced from other group firms and that it will not be affected by the NSEL crisis. Then, why did the CBI director link MCX-SX registration to the NSEL scam,” Abraham has asked.
Sources said the investigating agency also recorded the statements of Sebi officials who worked on the licence grant for currency futures trading to MCX-SX. An email query to Sebi on this issue remained unanswered.
CBI initiated the inquiry on alleged irregularities in granting sanction to MCX-SX by Sebi in 2008 and renewing the recognition in 2009 and 2010. There was also a concern raised on the fact that currency derivative trading was allowed for MCX-SX when the Union finance ministry had advised Sebi against it till the revenue department closed an inquiry against MCX and its promoter, Financial Technologies, for alleged tax evasion.
The exchange was initially granted permission for only a limited segment of currency derivatives in 2008, on the condition its licence would require approval every year.
Bhave had earlier slammed the CBI move, saying the agency was indulging in a “pick and choose” method while registering a PE against Abraham and himself. The inquiry against Bhave had come under a lot of criticism from various quarters, including the finance ministry and corporate India.
CBI had registered the PE in March this year.
