Tue, 19 Jul 2022 10:59 PM IST
The Enforcement Directorate (ED) on Tuesday arrested former Mumbai Police commissioner Sanjay Pandey in connection with a money laundering case linked to the alleged illegal phone tapping of NSE employees. The retired 1986-batch IPS officer was taken into custody by the federal probe agency after more than seven hours of questioning in the case.
He has earlier been questioned by the agency in another case booked by it to probe an alleged co-location scam at the NSE. Transaction of funds worth about Rs 12 crore allegedly to Pandey and his company are under the scanner of the agency. Pandey's company under scanner in this case was set up in March 2001.
The ED had last week arrested former NSE MD and CEO Chitra Ramkrishna in the case and had recently told the court that the "snooping of phone calls" at the NSE was being done from 1997.
Pandey is expected to be confronted with Ramkrishna after it obtains his custodial remand from a special PMLA court on Wednesday. The retired top cop is facing two ED and CBI FIRs -- the alleged phone tapping case and violation of Securities and Exchange Board of India guidelines in conducting NSE's system audit.
While the ED case (in the alleged phone tapping instance) is based on the CBI FIR, it was the ED that first detected the alleged snooping of phone lines at the bourse while probing the co-location instance and it informed the Ministry of Home Affairs (MHA) which asked the CBI to study ED findings and probe further. As the ED cannot file a criminal complaint under the PMLA on its own, the CBI case became a scheduled offence enabling it to file a money laundering case.
The retired IPS officer's role is being probed in connection with a company founded by him, which the CBI and ED allege, has violated SEBI norms in auditing two NSE stock brokers who were using the scam-tainted co-location facility.
The company iSec Services Private Ltd, which was founded by Pandey after he resigned from Police Service in March 2001, audited these traders during 2013-19 continuously, breaking the permissible limit of only three consecutive audits, according to the FIR. Shaastra Securities was audited during the period April 2013-March 19 and SMC Global Securities from October 2012 to September 2015 by iSEC Services in breach of the SEBI circular dated November 6, 2013, it alleged.
It is alleged that since the company was not eligible to conduct the audit it used the services of one Prabhpreet Singh of S Dhawan and Associates on payment of Rs 5,000 each for three audit reports signed by him-- November 14, 2017, and October 14, 2015, for Shaastra Securities and October 14, 2015, for SMC Global.
The CBI has alleged that for all purposes, the audit was carried out by iSEC Services and it simply got the reports signed by Singh who never visited the premises of the stock brokers. The agency has alleged that reports submitted to NSE by iSec were signed by certified experts and the audits were conducted by Chaturvedi who was not qualified to carry out the system audit.
(With Agency Inputs)