In an interview to Subhomoy Bhattacharjee, former Sebi chairman CB Bhave says the agency could have avoided the public spectacle by contacting him first, and wonders whether it is a diversion away from the real culprits in the NSEL case
What would you say on you being named along with your former colleague KM Abraham by the CBI in the preliminary enquiry for alleged irregularities in granting permission to MCX-SX in 2008 and subsequent renewals in 2009 and 2010?
I have already said and I reiterate that there were many people who handled this matter before it came up to me. I approved the proposal and I take full responsibility for it. Other officers cannot be held responsible and picking out just Abraham out of all of them is totally arbitrary.
On Wednesday, CBI director Ranjit Sinha said in an interview that “Thousands of crores of investor money have been swindled by MCX and it was incumbent on the agency (CBI) to look at the very procedure of registration of MCX” by Sebi. What is your reaction to the connection CBI is drawing between the NSEL case in a commodity market and the licence given to MCX-SX to work as a currency exchange in 2008?
The payment crisis occurred in NSEL and not MCX. Neither was NSEL licensed by us nor was it under Sebi’s supervision. MCX-SX is an entity separate from both MCX and NSEL. It is nobody’s case that thousands of crores of investors’ money was lost in MCX-SX. Either CBI has not seen the papers carefully or they are just floating trial balloons to see if they can somehow justify their PE (Preliminary Enquiry). NSEL, where the losses to investors occurred were given permissions by the Government of India, the ministry of consumer affairs.
Why do you say trial balloons?
That pending income tax investigation against group companies was another trial balloon they had floated. They forgot to mention that the investigation was closed later without any adverse findings. The issue was discussed in Sebi during my time. The same group was licensed by Central Electricity Regulatory Commission in June 2008 to run a power exchange in full knowledge of the income tax investigation. These facts would be part of Sebi papers. They just need to study the papers carefully.
The questioning of Jignesh Shah on NSEL case by CBI happened on the same day as the PE against you in MCX-SX case. What could be the connection?
It is quite incomprehensible. NSEL was given the permission for one day ready forward by the government in 2007. The fraud in NSEL occurred in 2013. We, in Sebi permitted MCX-SX to trade in currency derivatives in September, 2008. How is Sebi’s permission of 2008 to MCX-SX connected with the problems in NSEL in 2013? Moreover, in June, 2008 CERC permitted another group company of the same group to start a power exchange. The same MCX-SX was permitted by Sebi to continued…