After filing a Preliminary Enquiry (PE) against former SEBI Chairman CB Bhave, former member KM Abraham and two firms FTIl and MCX, the CBI enquiry will ascertain how MCX-SX was granted permission despite opposition by SEBI when Bhave was head of the regulatory authority.
MCX-SX was set up by Jignesh Shah-led Financial Technologies India ltd (FTIl) and its commodity exchange arm MCX and began functioning as a full-fledged stock exchange last year after a prolonged battle with SEBI.
The exchange was initially granted permission for only a limited segment of currency derivatives in 2008, on the condition that its licence would require approval every year.last year, SEBI asked MCX-SX to restructure its board and governance structure after a payment crisis broke out at the National Spot Exchange ltd (NSEl), also promoted by FTIl.
Bhave was appointed as SEBI Chairman in February 2008 and his three-year term ended in February 2011. Abraham’s term as a whole-time member of SEBI also ended in 2011. Incidentally, Abraham had written in 2011 to the Prime Minister’s Office that SEBI was being pressurised by the Finance Ministry to go easy on some corporates, including MCX and Sahara, against whom he had passed orders. However, these charges were rejected by the Finance Ministry.
The PE against former SEBI officials and others was registered on a day when the CBI lodged a regular case and carried out raids at various premises of NSEl across the country. Searches were conducted on the premises of NSEl promoter Jignesh Shah and in a case relating to alleged cheating of investors to the tune of Rs 5,500 crore and causing a loss of Rs 120 crore to the PSU Project and Equipment Corporation of India ltd.
In its FIR, the agency has named Shah, former NSEl CEO Anjani Sinha, officials of PEC, including Chief General Manager Rajiv Chaturvedi.