Markets regulator Sebi has expanded its scope of investigation into alleged cases of insider trading in the shares of Multi Commodities Exchange (MCX) and 63 Moons (formerly Financial Technologies or FTIL) around the time National Spot Exchange NSEL scam came out in open.
It is now investigating nearly all those who were employed with MCX and FTIL and traded in the shares of these companies between January 2012 and December 2013.
NSEL was a fully-owned subsidiary of FTIL (63 Moons) and MCX was a group company.
Since a fortnight, Sebi has sent two letters to current and former employees of MCX and FTIL, enquiring mainly about their dealings in the shares of these two companies. In its first letter, Sebi had asked those in its radar to explain the reasons for selling MCX and FTIL shares between April 27, 2012 and July 31, 2013. It was on April 27, 2012 that the government's department of corporate affairs for the first time started questioning NSEL and its management about their modus operandi. On July 31, 2013, NSEL was finally asked to stop all operations and settle all the trades. After NSEL was asked to stop all their trading operations on July 31, 2013, it came to light that there were a handful of brokers and traders who owed around Rs 5,600 crore to about thousands of investors. Even after three and half years, most of those investors have still not been paid by those brokers and traders, and cases are being fought in several courts.
According to market sources, several of the former key managerial personnel (KMPs) had sold large chunks of MCX and FTIL shares just months before NSEL's operations were closed by the government. Some of those people had even traded through their relatives. Sebi has asked these people to furnish not only their trading details, but also the names and income tax PAN details of their close relatives and family members — between January 2012 and December 2013. It is also investigating if these employees had entered into any off-market transactions in the shares of MCX and FTIL, sources said.
Interestingly, sources pointed out that Sebi seemed to be in a hurry with its investigations in the case as it gave just about two days to some of those investigated to furnish the details about their close relatives, family members and dependants.
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