The Central Bureau of Investigation has registered a case against certain then SEBI officials; a stock Exchange of Mumbai & its Promoter and others U/s 120-B r/w 420 IPC and 13(2) r/w 13(1) (d) (iii) of Prevention of Corruption Act, 1988 for allegedly granting extension in recognition of one of the stock exchanges. This case has been registered on the basis of findings of a Preliminary Enquiry registered earlier this year.
It has been alleged that the Promoters of Stock Exchange had entered into a buy back arrangement with a Nationalised Bank in violation of Securities Contract Regulation Act, 1956 and Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Shareholdings in Recognized Stock Exchanges) Regulation, 2006. The accused allegedly in connivance with SEBI officials, deliberately suppressed this material fact while applying for extension of recognition of the Stock Exchange, to conduct trade in Currency Derivatives, and, fraudulently obtained the extension of recognition of the Exchange in the year 2009 by cheating SEBI.
It has been further alleged that the SEBI officials deliberately did not issue notice to Stock Exchange for cancellation of its recognition in the Currency Derivatives, when SEBI had already rejected request of the same stock exchange for trading in other segments.