The Central Bureau of Investigation (CBI) has arrested a Deputy General Manager (DGM) of SEBI on charges of graft.

A CBI statement on Friday said that the DGM and a middleman were arrested for allegedly demanding and accepting Rs10 lakh.

Both the middleman and the DGM were produced in court on Friday. The CBI has launched further investigation into this issue. On receiving a complaint from a proprietor of an Ahmedabad-based firm, CBI trapped the middleman who had come to receive the bribe of Rs 10 lakh.

In September 2011, SEBI had barred the Ahmedabad-based proprietor from trading, for market manipulation of Global Depository Receipts (GDR).

The DGM was the investigating officer in this case and had issued a show cause notice to the proprietor's firm. Meanwhile, the proprietor came into contact with the Mumbai-based middleman who promised to get work done in favour of the proprietor.

The middleman claimed close contact with a DGM of SEBI and had allegedly demanded a bribe of Rs 25 lakh on behalf of the DGM. At the same time, the proprietor also met the SEBI DGM who asked him to pay the bribe to the middleman.

When the proprietor was asked to pay the first instalment of bribe of Rs 10 lakh, he did not want to pay up and approached the CBI. CBI then searched the premises of the middleman and the DGM of SEBI at Mumbai and New Delhi.

When contacted, a SEBI official said, “We came to know from the CBI statement that one of our officials has been arrested. However, we are yet to receive any official communication from CBI in this regard.”

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