Saradha scam bribery case. SEBI employees protest against CBI raids on colleagues

Employees of Securities and Exchange Board of India (SEBI) are protesting outside the SEBI headquarters in Mumbai against Monday’s CBI raids on three officials of the market regulator on bribery allegations in the Saradha chit fund scam, sources told BusinessLine . However, even the Supreme Court had asked CBI to investigate SEBI’s role. But employees are of the view that they are victims of the political fight in the upcoming West Bengal elections.

Nearly five years after the key accused in the scam revealed in their statement that huge bribes were paid to senior SEBI officials to look the other way, the CBI conducted raids on three officials in the regulator’s Mumbai office on Monday. The raids were conducted at both the residential and office premises of the SEBI officials.

The scam involved thousands of crores being collected through Ponzi schemes in violation of SEBI rules, Companies Act and other anti-money laundering norms. Only SEBI-registered fund managers are permitted to collect money from investors.

CBI raids were conducted on SEBI officials of the rank of chief general managers, those posted in West Bengal, the sources said. Following the scam coming to light around 2013, SEBI moved at a snail’s pace and no particular action was taken by the regulator for years. The CBI case is based on the premise that SEBI delayed action against the accused in the Saradha chit fund case after accepting bribes.

In February 2015, the Supreme Court came down heavily on SEBI and RBI, saying the regulators were “largely responsible for scams of such magnitude not just taking birth but flourishing unhindered”. The SC bench had also remarked that “all guilty officials who connived have to be investigated. There should be nothing outside the scope of investigation.”

The SC had further read out a synopsis of investigations and said that it went to the extent of suggesting that “regular payments towards bribe were paid through middleman to some of those who were supposed to keep an eye on such Ponzi companies.”

“The regulatory authorities, it is common ground, exercise their powers and jurisdiction under Central legislations. Possible connivance of those who were charged with the duty of preventing scams of such nature in breach of the law, therefore, needs to be closely examined and effectively dealt with. Investigation into the larger conspiracy angle will, thus, inevitably bring such statutory regulators also under scrutiny,” the SC had said.

Many prominent personalities, including politicians, Members of Legislative Assembly (MLAs) and Members of Parliament (MPs), have been accused of involvement in the scam. Even at the CBI and ED too, the case went into cold storage for years but resurfaced after Home Minister Amit Shah last week said all links in the Saradha scam would be investigated fully. Shah has been campaigning for the BJP for the upcoming state elections. The Saradha scam is a political hot potato since it is alleged that it could be linked to the Mamata Banerjee-led West Bengal government.

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