As authorities close in on the probe into the operations of National Spot Exchange Ltd (NSEL), fresh facts have emerged involving Anjani Sinha, who was removed as CEO of the beleaguered bourse that has defaulted on payments to clients and are facing a multi-agency investigation for flouting regulatory rules.
Officials are now going through the details of Sinha's alleged past involvement in share manipulation and badla trading in erstwhile regional bourses such as the Ahmedabad Stock Exchange (ASE) and the Magadh Stock Exchange (MSE).
Sinha did not respond to emails and text messages sent by HT.
In 2003, the Securities Exchange Board of India (SEBI) had removed Sinha as the executive director the ASE for being unable to stop illegitimate trading activities in the stock exchange.
SEBI had also probed charges against Sinha for misleading the regulator by stating that no illegal activities had taken place in ASE.
The regulator had raised specific questions on Sinha's inability to prevent illegal badla trading within the stock exchange premises.
Badla trading is the process of buying stocks with borrowed money where instead of paying cash, the buyer can ask the broker to find a borrower to finance the transaction. The trade was banned in 2001.
In 2003, Sinha and members of the board of the ASE faced a probe for informing the regulator that no badla trading was taking place in stock exchange, where facts were to the contrary.
Authorities are also examining Sinha's tenure as the chief general manager of MSE during which a controversy regarding huge amounts of stolen share physical shares had broken out between 1991 and 1994, resulting in a major payments crisis at MSE.
The Forwards Markets Commission (FMC) in a communication to NSEL on August 20, the day Sinha was removed as CEO, clearly stated that "Your status as a 'fit and proper' person is at serious risk and may lead to consequential actions."