Shashwati Chowdhury
Published on: July 11, 2022 at 20:20 IST
According to people with knowledge of the matter, illegal phone taps of National Stock Exchange (NSE) employees involved acts of omission or commission on the part of the bourse, the Securities and Exchange Board of India (SEBI) and audit firm EY India. This had come to light during investigations into alleged irregularities relating to the co-location facility at the bourse.
SEBI and EY failed to investigate into the contract given to iSec Services Pvt., which is claimed to have carried out the snooping, and they found no evidence of illegal phone line monitoring between 2009 and 2017. Phone monitoring is only permitted by authorised government agencies. The people said that the NSE failed to mandate the audit firm to conduct a thorough investigation into iSec Services and failed to alert the capital market regulator to the allegedly illegal activities taking place at the bourse. CBI officials claim that NSE engaged iSec Services, a company founded by former police official Sanjay Pandey, under a 4.45 crore contract to conduct “periodic study of cyber vulnerabilities” at the market.
According to the CBI, the true goal was to spy on employees to see if they were discussing the co-location concerns among themselves or discussing about them.A further 8 crore contract was given to complete a brokerage audit.
In the phone tapping case, Pandey is one of the accused along with former NSE chiefs Chitra Ramkrishna and Ravi Narain.
During the course of its money laundering investigation related to the co-location issue earlier this month, the Directorate of Enforcement (ED) stumbled into the transcripts of taped conversations.
In the co-location case, the CBI is looking into accusations of cheating and criminal conspiracy against former NSE and Sebi employees as well as certain brokerages.
