Abraham’s Offensive Against The CBI

Abraham's Offensive Against The CBI www.ambitionias.com
  • Former Whole Time Member of the Securities and Exchange Board of India (SEBI), K. M. Abraham has launched an offensive against Central Bureau of Intelligence (CBI) in response to the Preliminary Enquiry (PE) registered against him and  former Chairman of SEBI, C. B. Bhave, over irregularities in sanctions granted to MCX Stock Exchange in 2008.
  • His arguments:
    • Has questioned CBI’s authority to enquire into the decision making process in a regulatory and quasi-judicial body such as SEBI.
    • The CBI can enquire into charges of corruption resulting from a decision taken by a public servant, but the starting point of the investigation should be the decision itself, and not the decision-making process.
    • He accused the CBI of dealing with the enquiry in a callous manner, and attacked them for having revealed details of the PE to the media, thereby violating  the principle of confidentially that lay in its own manual.
    • Accused CBI of tarnishing the reputation of hard working individuals and alleged them of using the PE to divert attention from the raids carried out on the promoters of National Stock Exchange Limited (NSEL).
    • Has drawn attention to the various decisions of SEBI since his exit, particularly regulatory permissions and orders that were issued to MCX-SX that had far more regulatory implications and associated risks, and noted the absence of any enquiry into these.
    • Hinted at a possible connection between the of imprisonment of Subrata Roy and the registration of PE against him and Mr. Bhave, as it was his order against two Sahara entities that led to the unravelling of the group and its activities.
  • In July 2012, SEBI permitted MCX-SX to begin a full-fledged stock exchange.
  • In September 2012 extended its recognition to the exchange.
  • Extended its recognition again in September 2013 after the NSEL scam surfaced.
  • In March 2014, Forward Markets Commission found one of the promoters of MCX-SX by name Financial Technologies as not fit and proper.
  • SEBI did the same later in March 2014.
  • Read at: http://www.thehindu.com/todays-paper/tp-business/abraham-goes-on-the-offensive-against-cbi-over-preliminary-enquiry/article5997209.ece
  • http://www.thehindu.com/todays-paper/tp-business/post2011-sebi-decisions-in-focus/article5997203.ece

Exams Perspective:

  1. Spot Exchange Scam
  2. SEBI
  3. CBI
  4. MCX-SX
  5. National Stock Exchange Limited (NSEL)
  6. Forward Markets Commission