The Madras High Court has issued notices to Sebi’s Whole-Time Member SK Mohanty and Central Vigilance Commission (CVC), in connection with the NSE co-location scam on a petition filed by a Chennai-based group.
The public interest litigation (PIL) petition was filed by Chennai Financial Markets Accountability (CFMA).
Areas of concern highlighted by CFMA include the order passed by the Sebi in National Stock Exchange (NSE) co-location scam, which was overseen by Mohanty.
The scam was related to the alleged improper dissemination of information from the computer servers of the market exchanges to the stock brokers.
In an order dated June 19, the Madras High Court issued notices to Mohanty and Central Vigilance Commission.
The Chennai-based group accused Sebi of intentionally misdirecting and derailing the investigation into the NSE co-location scam.
CFMA had filed a complaint with CVC seeking an inquiry against Mohanty for his misdeeds during his tenure as a public servant with the Securities and Exchange Board of India (Sebi). It also filed a mandamus writ petition with Madras High Court seeking suitable direction to CVC, resulting in the issuance of the order.
CFMA, which is a body formed to address public concerns in the areas of banking, insurance, financial, or any other domain had reached out to CVC through its complaint cum representation of March 18, 2023. The complaint highlighted the corrupt and collusive practices of Mohanty.
In a statement, CFMA President Manoj Sheth said the Madras High Court order to issue notices to Mohanty and the CVC will “accelerate investigation into Mohanty’s misdeeds and would lead in maintaining healthy financial condition for investors”.
The CVC is empowered to inquire into offences alleged to have been committed under the Prevention of Corruption Act, 1988, by certain categories of public servants.
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