Ponzi scams: Sebi officials come under CBI scanner

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New Delhi, Feb 14: The Central Bureau of Investigation (CBI) will question several officers of the Security Exchange Board of India (Sebi) after it was found that they had either looked away or aided Ponzi companies who cheated the public of over Rs 2000 crore.

An officer with the CBI informed Oneindia that they have found that at least 8 officials from the Sebi had deliberately looked away and aided ponzi groups go about their scam. The Serious Frauds Investigation Office which had probed the Saradha scam had pointed the names of at least 8 officials alleged to be part of the scam.

Ponzi: Sebi officials under CBI scanner

The CBI received a major boost when the Supreme Court had on Friday came down heavily on both the SEBI and also the Reserve Bank of India on their handling of Ponzi scams especially in West Bengal.

A petition had been filed in the Supreme Court seeking a CBI probe into the functioning of 94 Ponzi companies in West Bengal and Odisha. It was alleged that these companies had collectively cheated the public of Rs 2,000 crore.

All guilty officials must be investigated:

The Supreme Court while hearing the petition made a scathing attack on the Sebi and also the RBI. "All officials who have connived must be probed and none can be let out of the purview of the investigation, the Supreme Court observed.
Sebi and the RBI are largely responsible for scams of such a huge magnitude flourishing. We have touched upon the role of the Sebi and the RBI earlier. However they have turned a blind eye, the Bench also observed.

Officials were bribed:

As per the report filed by the Serious Frauds Investigation Office, it was pointed out that several officials especially from the Sebi were bribed during the Saradha scam. Their role was also questioned in the handling of the various other ponzi scams too.

The Bench of the Supreme Court said that investigations suggest that regular payments towards bribe were paid through middleman to some of those who were supposed to keep an eye on such ponzi companies.

Need to examine Sebi, RBI closely:

The Supreme Court also pointed out that there is a need to observe the functioning of Sebi and RBI closely. Those officers who have been part of a larger conspiracy must be investigated, the court also ruled.

The CBI says that these observations come in handy since there were some teething troubles when they tried investigating the officers from the Sebi. Cases will now be booked and arrests carried if necessary the officer from the CBI also informed.

Sebi cannot wriggle out:

Sebi had argued that chit funds did not fall under its purview. The court was however quick to point out that Sebi had on different occasions ordered the winding up of two companies which were involved in ponzi scams.

When the Sebi has issued such an order how can they now claim that they have no jurisdiction, the court observed. How can you can that you have no role to play in ponzi scams, the court asked Sebi.

The Bench was also harsh on the Sebi when it said that connivance by some of its officials had led to scams of huge magnitude going on unabated. There is a deep rooted apathy if not criminal neglect on part of some of the officers and they must be investigated and brought to justice the Bench also pointed out.

Oneindia News

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