The CBI on Thursday registered a preliminary enquiry against Sebi former chairman C.B. Bhave and ex-member K.M. Abraham, as also against Jignesh Shah-founded FTIL and MCX, among others.
According to the CBI, the PE was registered on issues of alleged irregularities in granting sanction to the MCX Stock Exchange (MCX-SX) by the Securities and Exchange Board of India in 2008 and renewing the recognition in 2009 and 2010.
The probe by the CBI is to ascertain how MCX-SX was granted permission despite opposition by Sebi when Mr. Bhave was head of the regulatory authority.
MCX-SX was set up by Mr. Shah-led Financial Technologies India (FTIL) and its commodity exchange arm MCX and began functioning as a full-fledged stock exchange in 2013 after a prolonged battle with Sebi.
An FTIL spokesperson told PTI, 'We will provide full cooperation to the authorities.' Mr. Bhave and Mr. Abraham could not be immediately contacted.
The exchange was initially granted permission for only a limited segment of currency derivatives in 2008, on the condition its license 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 (NSEL), also promoted by FTIL.
The PE was registered on a day when the CBI carried out raids at various premises of NSEL.
Mr. Bhave became Sebi chairman in February 2008 and his three-year term ended in February 2011. Mr. Abraham’s term as a whole-time member of Sebi also ended in 2011.
Mr. Bhave was appointed a trustee of the IFRS Foundation, responsible for the governance and oversight of the International Accounting Standards Board in 2012.
Incidentally, Mr. 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 as also by Sebi.