The enforcement directorate (ED) on Friday summoned Mumbai's former police commissioner Sanjay Pandey in connection with a prevention of money laundering case related to the phone tapping of National Stock Exchanges's (NSE's) employees between 2009 and 2017.
On Thursday, the ED got a four-day custodial remand of Chitra Ramkrishna, former managing director and chief executive officer (MD&CEO) of NSE.
According to IANS, the ED wants to confront Ms Ramkrishna with Mr Pandey and record the statements.
"Money was laundered during the phone tapping and the payments made are alleged proceeds of crime. There are shell companies. We want to know who was handling the entire operation," the report says, quoting a source.
According to a report from the Times of India (ToI)
, the central bureau of investigation (CBI), and now the ED, have named Mr Pandey, Delhi-based company iSec Services Pvt Ltd, NSE's former MD and CEOs Ravi Narain and Ms Ramkrishna, the Exchange's executive vice-president Ravi Varanasi and head (premises) Mahesh Haldipur, among others, in their respective complaints.
"The ED will probe if any proceeds of crime were generated through this alleged illegal act and the accused laundered public funds," the report says.
The ED's case is based on a first information report (FIR) filed by the CBI. This case was lodged by the probe agency at the directions of the Union ministry of home affairs (MHA).
The CBI had on last Friday recorded the statement of Mr Pandey at its Mumbai office. After the questioning, he was allowed to go. The CBI had also conducted raids in Mumbai, Pune and several other parts of the country in this connection.
"It has been alleged that Ms Ramkrishna used iSec Services to tap the phones of NSE's employees. The phone calls made by NSE employees between 9am and 10am were tapped and recorded by iSec Securities. It has been alleged that Mr Pandey helped tap the phone calls illegally," the source told IANS.
According to our sources, there was a move to have calls made from NSE's EPABX system recorded to check if any of the employees were leaking information to outsiders. Mr Pandey's firm was reportedly given the contract. It is unclear from information available so far whether the firm tapped any other calls.
Sources in the Exchange administration say that tapping EPABX lines may not be illegal because the market regulator has a similar mandate requiring brokerages to record and maintain records of all calls to their clients. It is a precautionary and deterrent action for brokers, but the mandate for the Exchange to tap calls is unclear.
It is not immediately clear whether CBI's action is about tapping phones and whether the monitoring of calls is done from NSE's EPABX as per established norms. If it was formally done, it is unclear whether the information was ever furnished to the Securities and Exchange Board of India (SEBI) during the lengthy investigation through multiple audits into the co-location (Colo) scam starting 2015. There is no mention of call records in any of the show-cause notices and multiple orders the regulator has issued in the past seven years.
It is common knowledge that iSec Services had the mandate to conduct annual broker audits required by the stock exchange; however, its website does not list NSE or any brokers as clients (https://www.isec.co.in/
Mr Pandey, who retired as Mumbai's CP, was summoned by the ED to be present before its Delhi office on 5th July under the Prevention of Money Laundering Act (PMLA) and has recorded his statement with the agency.
Mr Pandey was summoned about iSec Services, a company he set up in 2001 when he was not in the service. The 1986-batch officer from the Indian Police Service (IPS) cadre, who studied at IIT-Kanpur and Harvard University, is understood to have set up the company after he resigned from service. However, his resignation was not accepted by the Maharashtra government and he re-joined the police force.
Mr Pandey quit the company in 2006 when he returned to the police force and his mother and son were directors.
Meanwhile according to a report from Mid-Day
, Mr Pandey is also under the scanner for asking Amravati police commissioner to stop investigation of the Anugrah Ponzi scheme case. He had done so during his tenure as the director general of police (DGP) for Maharashtra. Before his appointment as CP Mumbai this year in February, Mr Pandey was DGP of Maharashtra for 10 months.
Quoting sources, the newspaper says Rajnish Seth, the current DGP, may order a review into the ex-commissioner Sanjay Pandey’s alleged meddling in the investigation of a Ponzi scheme.