The income tax department on Friday seized about Rs 11 crore cash as part of its searches in the NSE (National Stock Exchange) servers scandal. Premises of the brokers and the former MD and CEO of the exchange were raided. Documents, hard discs and computers among other potential evidence was seized.
I-T officials said that cash hidden in various wooden cavities of furniture and other items was seized from the Delhi premises of a broker identified as Sanjay Gupta. A major chunk of the amount of Rs 11 crore seized from 3 locations in Delhi was from the place of Gupta’s business partner. Nearly Rs 10 crore was found in a cavity beneath a staircase at one of the premises that was searched, officials said.
Besides Delhi, searches were also conducted at Mumbai, Kolkata and Bengaluru. This is the third day of the raids.
The NSE exchange scam came to light in 2011 when a whistleblower blew the lid of “how the NSE’s top brass, in connivance with some bureaucrats in the then Finance Ministry and powerful ministers in the UPA government” manipulated the system. In the NSE co-location case, certain brokers, including Gupta’s OPG Securities, operating on its trading platform allegedly got preferential access to servers of the exchange.
A co-location facility provides early login and faster access to data feed of the exchange. Even a split-second faster access can yield huge gains for a trader. The NSE’s daily transactions exceed 3 lakh crore. The exchange discontinued the facility since 2014.
The co-location case is under the SEBI scanner while the NSE had earlier this week submitted a forensic audit report on the issue, prepared by auditing firm EY, to the markets regulator.
EY was entrusted with carrying out the forensic audit into cash markets, currency derivative and interest rate futures platform. The nation’s largest bourse had earlier engaged Deloitte for a forensic audit of its equity derivatives platform.
NSE’s IPO PLANS DELAYED
The controversy has delayed NSE’s IPO plans. Its rival BSE already went public in January.
The exchange has also submitted a study conducted by the ISB to determine whether certain NSE brokers made any abnormal profits as a result of getting preferential access to the servers of the exchange with the co-location facility. It can be recalled that earlier, Deloitte, after a forensic audit, had named a few brokers who had profiteered with this facility.
SEBI, which is probing the scandal, had in a notice to the exchange noted that NSE had allowed a company called Sampark Infotainment to lay the fibre optic cables, which in turn connected the NSE to the Bombay Stock Exchange and allowed a firm named Alpha-Grep to benefit before connectivity was opened up for others. The role of these companies could have been highlighted earlier if the NSE so wished because these companies had visited the NSE premises nearly 120 times.
Indiatoday.in
