The Enforcement Directorate on Tuesday arrested former Mumbai Police Commissioner Sanjay Pandey in connection with a money laundering probe linked to the alleged illegal phone tapping of National Stock Exchange (NSE) employees during 2009-17.
The agency had summoned the retired Indian Police Service officer to join the probe. Following the questioning, it arrested him. Last week, the ED had arrested former NSE managing director Chitra Ramkrishna and taken her into custody for recording her statement in the same case, which is based on a First Information Report (FIR) registered by the Central Bureau of Investigation on July 7.
Apart from Mr. Pandey and Ms. Ramkrishna, among those named in the FIR are former NSE managing director Ravi Narain, its then executive vice-president Ravi Varanasi and head (premises) Mahesh Haldipur; Delhi-based iSec Services Private Limited and its functionaries. It is alleged that iSec Services was set up by Mr. Pandey in March 2001. He had later resigned from the company.
NSE, SEBI officials’ role
“It was alleged that during 2009-17, then MD [Mr. Narain], then DMD [Ms. Ramkrishna], then executive vice-president and then head (premises) of the NSE and the private company conspired to illegally intercept the telephones of NSE employees,” the agency had earlier said, adding that iSec Services had been engaged on the pretext of conducting a “periodic study of cyber vulnerabilities” at the NSE.
The CBI had registered a separate case against iSec Services, two “high-risk” category brokers -- SMC Global Securities and Shaastra Securities Trading -- and six others on May 19, alleging that it audited the brokers’ trading systems during 2013-19 in violation of the Securities and Exchange Board of India (SEBI) guidelines. The role of SEBI and NSE officials is also being suspected.
In the FIR, the agency noted that as per the SEBI and NSE guidelines during the check period, the stock brokers having the co-location facility had been categorised as “high-risk” as they were into algorithmic trading. They had to get their trading systems audited every six months. The same auditor could perform a maximum of three successive audits of a stock broker. iSec Services allegedly got the audit reports of the two broker firms signed by other auditors to bypass the guidelines.
On Monday, the CBI had examined Mr. Pandey and former Mumbai Police chief Param Bir Singh in the alleged corruption case against former Maharashtra Home Minister Anil Deshmukh.
