SEBI settled the case against three top officials of Metropolitan Stock Exchange (MSEI) with the payment of ₹33.15 lakh.
SEBI had received various complaints on irregularities in the working of MSEI management between July 2019 and July 2021. The market regulator had advised MSEI to appoint a reputed forensic auditor to conduct the audit of MSEI covering the allegations.
Ernst & Young LLP, which conducted the forensic audit, found various irregularities including failure to follow the standard operation procedure in costing of project worth ₹80 lakh with U Trade, a fintech company. The decision to award matching engine project to U Trade was an error in judgement by the earlier “Authorised Team”, which is no longer with the exchange.
SEBI observed that the Authorised Team included Balu Nair (Interim CEO), Kunal Sanghavi (then CFO), Kundan Zamvar (CISO and VP-IT) and Devanshu Desai (consultant) and that Balu Nair, Kunal Sanghavi and Kundan Zamvar are qualified to hold key managerial persons during the period under review.
Accordingly, SEBI issued show-cause notice to Balu Nair, Kunal Sanghavi and Kundan Zamvar in September 2022 for failing in their duty.
In February, all the three MSEI official filed for a settlement application agreeing to pay ₹11.05 lakh each. The high-level committee of SEBI approved the settlement proposal in April and the amount was remitted in May.