The Income Tax Department is probing the accounts of 11 brokerages and two foreign portfolio investors (FPIs) in the co-location case. The Income Tax Department is investigating whether he had provided indirect benefits to some board members of the National Stock Exchange (NSE) in exchange for sensitive information.
People with knowledge of the matter said that income tax officials suspect that these entities used the tax haven to buy properties, fund holidays and invest in certain businesses of the families of these board members. Those being probed by IT include Infotech Financials Pvt Ltd (IFPL), which had received trading data from NSE to calculate the liquidity index.
Sunita Thomas, wife of Suprabhat Lala, a senior NSE official, was one of the directors of Infotech Financial. According to the first report of the Securities and Exchange Board of India (Sebi) in the co-location case, Thomas was also the sister-in-law of another NSE official Ajay Shah. She was also a market economist. She was the one who contracted IFPL. He was instrumental in giving, which he later allegedly used for commercial gain.
A recent Sebi report on this matter has shown interest in the 2010-14 case and questioned several former NSE officials and one of them has been arrested recently. On the other hand, Ajay Shah and Good morning Lala did not answer the questions.
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Tax officials are scrutinizing foreign travel data of people named in the NSE co-location case to find out about these brokerages and FPIs.
“Investigation shows that this was done to hide any links between the parties involved. We are also considering investments in companies promoted by some of their family members.”
Serving NSE officials are on the radar
A person associated with Malle said “There is a reason for going to the Seychelles for the holiday. The investigation being carried out in the case shows that it was done to hide any clues between the parties involved. We are aware of some of his family members.” We are also tracing the investments made by the members in the promoted companies.
At present, Delhi-based brokerage OPG Securities is being investigated by other government agencies. Apart from this, 10 other brokerages and two FPIs are under investigation. “It was not the only brokerage house. We are probing the involvement of all other brokerage houses nominated by SEBI during initial investment,” a person quoted a report by Sebi whole time director SK Mohanty as saying.
The I-T department is also probing the transactions of three other serving NSE executives – Ravi Varanasi, then head of business development at NSE; Deviprasad Singh, Head of Co-location Support; and Nagendra Kumar.
Ravi Varanasi’s office did not respond to queries, ET reported. We could not reach Nagendra Kumar and Deviprasad Singh.
Let us tell you that all three were under the watch of SEBI, they were accused of giving them undue advantage in the market by colluding with two brokerage firms apart from OPG Securities.
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