CBI questions 3 Sebi officials in Saradha scam case

NEW DELHI: The Central Bureau of Investigation ( CBI) has questioned three senior officials of Securities and Exchange Board of India ( Sebi) as part of its investigation into the Saradha scam.

Sources in the investigating agency said Sebi’s former executive director (ED) KN Vaidyanathan and serving EDs SV Muralidhar Rao and S Ravindran have been examined on procedures related to enquiry and proceedings against SRIL (Saradha Realty).

This is part of the CBI’s ongoing probe into the role of the regulators in the Saradha scam, as directed by the Supreme Court, the sources added.

"These EDs have been in charge of the (department looking at) Collective Investment Scheme,"a CBI official said. While Vaidyanathan is no longer with Sebi, Rao is in charge of the Department of Economic and Policy Analysis at SEBI while Ravindra handles the Corporation Finance Department and the Special Enforcement Cell at Sebi.

Earlier CBI had named Rao as an accused in a First Information Report (FIR) lodged by it in August regarding the extension of recognition given to MCX-SX in 2009. In May, the Supreme Court (SC) had questioned the apparent failure of regulatory authorities in curbing ponzi schemes like Saradha.

"Investigation conducted so far puts a question mark on the role of regulatory authorities like Sebi, Registrar of Companies (ROC) and officials of the RBI within whose respective jurisdictions and areas of operation the scam not only took birth but flourished unhindered,"the SC observed in May.

The CBI is now trying to ascertain if Sebi had failed in its duties by failing in monitoring the growth of Saradha chit fund scheme in West Bengal and Odisha. In April 2013, Sebi had termed the schemes of Saradha Realty as an illegal Collective Investment Scheme (CSI). But this order came nearly three years after Sebi received the first complaint from West Bengal’s Economic Offences Investigation Cell informing them of the illegal activities of Saradha Realty.