The Delhi High Court on Tuesday asked an officer from the Central Bureau of Investigation (CBI), who is investigating the National Stock Exchange (NSE) co-location (Colo) scam, to personally be present before the Court on the next date of hearing, says a report from Bar & Bench
According to the report, the direction came from the bench of justices Siddharth Mridul and Anup Jairam Bhambhani while hearing a petition filed by journalist Shantanu Guha Ray. He alleged that despite the whistle-blower providing details of the scam nearly three-and-half years back, nothing ‘substantial’ has happened in the case.
Senior counsel Gaurav Bhatia, appearing for Mr Guha Ray, told the HC that the allegations are that there was a scam of several thousand of crores, yet the CBI has taken no significant action in the matter.
However, Anil Grover, counsel for the CBI, contended that a case has already been registered in the matter and the investigation is likely to be completed in six to eight months. He also submitted before the Court that CBI has already filed a status report in the matter and it now wants to file another status report in a sealed cover.
The bench says it has some questions for the investigating officer (IO) probing the scam and sought his personal presence. “We will examine both the reports on the next date of hearing,” the bench says.
The HC then listed the case for further hearing on 14 January 2022.
In 2015, an anonymous whistle-blower had written to Sucheta Dalal, managing editor of Moneylife, alleging that some trading members on the NSE, who had subscribed to the Exchange’s co-location server facility, were getting an unfair advantage by way of faster access to the Exchange. The whistleblower also alleged the collusion of NSE officials.
It may be recalled that Moneylife
was the first to expose this scam in mid-2015
, for which NSE had filed a defamation case against us. A single judge in Bombay HC dismissed the frivolous suit and ordered the NSE to pay a fine of Rs50 lakh (mainly to two Mumbai hospitals). After filing an appeal against the order, NSE paid up the penalty. Meanwhile, in the wake of the scam, the top brass of NSE had to resign and a new management team took charge.
Earlier in July this year, the Union government also informed the Lok Sabha that CBI had already registered a case in the NSE Colo scam and the investigation was 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 the 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, “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.”