The Delhi High Court on Tuesday directed the Central Bureau of Investigation (CBI) to submit on May 22 a detailed status report on its investigations into the NSE co-location scam.
This came at a hearing on a PIL filed by petitioner Shantanu Guha Ray, who was represented by noted lawyer Mahesh Jethmalani at the Delhi High Court.
Lawyers representing the CBI, and the NSE were also present at today’s hearing before the bench of justices Siddharth Mridul and Manoj Kumar Ohri.
The PIL is essentially a fallout of the CBI complaint filed by Ray in August 2017 in the NSE co-location matter. With the pace of CBI investigation being slower than expected and the scope of the FIR filed being extremely limited, the petitioner had recently moved the Delhi High Court seeking larger ambit and scope of investigation for CBI.
Indian regulators, government and policy makers are yet to get a complete handle on the NSE co-location scam, which had resulted in wrongful gains of ₹ 50,000-75,000 crore to deviant brokers. The CBI is also unable to make any headway on the matter, it is learnt.
The petitioner had, in the PIL, contended that the NSE had abused its market position and helped deviant brokers and politicians make unlawful and illegal gains, thereby rendering the institutional set up of exchanges itself at risk. It has also been alleged that SEBI has not taken any action against such brokers from the NSE, its concerned officers and other culpable persons.
The NSE co-location scam is all about market manipulation at the NSE. It had been alleged that select players obtained market price information, ahead of the rest of the market, enabling deviant brokers to make wrongful gains running into hundreds of crores.
With the alleged connivance of insiders, the NSE’s algo trading was rigged and the co-location servers were used to ensure substantial profits to a set of brokers.