MUMBAI: India’s federal police said on Tuesday they had arrested an executive and searched the homes and offices of former and current officials of the country’s capital markets regulator in an investigation into the granting of a stock exchange licence.
The Central Bureau of Investigation (CBI) said it was investigating the renewal in 2009-10 of the operating licence for MCX Stock Exchange, now the Metropolitan Stock Exchange.
The police alleged in a statement that the exchange and officials from the Securities and Exchange Board of India (SEBI) had worked together to renew the licence, even though the exchange may not have been eligible for such an extension.
CBI further said it was investigating whether MCX had violated regulations that should have prevented it from getting a renewal of its license.
SEBI could not be reached for comment, while Multi Commodity Exchange of India (MCX) confirmed in a statement that CBI had conducted a search “in respect of recognition granted by SEBI to Metropolitan Stock Exchange of India Ltd (formerly known as MCX Stock Exchange Ltd).”
CBI did not identify the executive or the SEBI officials, but a senior police official told Reuters the individual arrested was Jignesh Shah, the former chairman of Financial Technologies (India) Ltd (FTIL), which was the majority owner of the MCX Stock Exchange and is now known as 63 Moons.
Shah, now promoter and chairman emeritus at 63 Moons, had been “taken into custody” by CBI, the company said in a statement on Tuesday.
The senior police official, who declined to be named, also said that police had searched the homes and offices of two former SEBI officials, including former executive director JN Gupta, and current SEBI officials: executive director Murali Dhar Rao and deputy general manager Rajesh Kumar Dangeti.
Gupta declined to comment when contacted by Reuters by telephone, while Rao and Dangeti could not be reached by telephone at the SEBI headquarters in Mumbai.
CBI sources had previously said SEBI officials were being investigated, but the raids mark an escalation of the probe. - Reuters
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