ED registers money laundering case against ex-Mumbai top cop, others

Updated on Jul 14, 2022 04:14 PM IST

Former Mumbai police commissioner Sanjay Pandey was booked along with Chitra Ramkrishna and Ravi Narain, the two former NSE chief executive officers

ByNeeraj Chauhan

The Enforcement Directorate (ED), which stumbled upon the phone tapping of National Stock Exchange (NSE) employees while probing the co-location scam, has now registered a money laundering case against former Mumbai police commissioner Sanjay Pandey, Chitra Ramkrishna and Ravi Narain, the two former chief executive officers of the bourse.

People familiar with the matter said ED sent a report to the Union home ministry regarding illegal phone tapping before it was referred to the Central Bureau of Investigation (CBI), which registered a criminal conspiracy case against the three last month. Based on CBI’s First Information Report (FIR), ED invoked charges under the Prevention of Money Laundering Act (PMLA) against them. It will seek custody of Ramkrishna, who is in prison.

Investigators said Ramkrishna and Narain allegedly hired Pandey’s family firm iSEC Services Pvt Ltd for illegally tapping landlines of NSE employees using devices called red servers. “Almost everyone’s landline at NSE building in Mumbai was tapped except of top brass of NSE from a space provided to iSEC in the bourse building’s basement. We have information that the surveillance went on for over five years continuously... So, we are investigating role of iSEC during the entire period,” said an officer, who did not want to be named.

HT last week reported each of the devices – iSEC installed four red servers at the NSE office – had the capacity to tap 120 calls at a time. CBI seized one of the devices last Friday. The transcripts iSEC prepared were handed over to the NSE bosses, according to a second officer.

ED investigators said the accused destroyed several transcripts particularly after investigations began into the NSE co-location scam in 2018. Ramkrishna was arrested in March this year in the co-location case. Narain is also prime suspect in that case.

Besides Ramkrishna, Narain and Pandey, the CBI and ED have named former NSE executive vice president Ravi Varanasi and former head (premises) Mahesh Haldipur in the illegal tapping case. Pandey incorporated iSEC in March 2001. His son and mother took over the company after he quit as its director in May 2006.

iSEC allegedly received 4.45 crore for the illegal tapping, which was camouflaged as a periodic study of cyber vulnerabilities at NSE. It also provided transcripts of the taped conversations to senior management of the stock market. Top brass of NSE also allegedly issued work orders in favour of iSEC and illegally intercepted the phone calls of its employees in contravention of provisions under the Indian Telegraph Act.

According to CBI, no permission for surveillance was taken from the competent authority as provided under section 5 of the Indian Telegraph Act. No consent of the employees of NSE was also taken.

Former iSEC directors have also been booked in the case. ED interrogated Pandey last week. Now, CBI is planning to summon him in the case, according to a third officer.

Pandey served as Mumbai Police commissioner for four months before he retired on June 30. He was also Maharashtra’s acting director general of police from April 2021 to March 2022.

The ED and CBI have been probing the NSE co-location fraud case since 2018. Several stock-broking companies allegedly got preferential access to the NSE’s server when Ramkrishna was the CEO of the bourse between 2010 and 2015. CBI arrested Ramkrishna on March 6. Former NSE group operating officer Anand Subramanian was also arrested in February.

About a dozen brokers in multiple cities are facing the CBI probe in the case, HT reported on May 22. The probe agencies are also investigating the purported roles of officials of NSE and market regulator Securities and Exchange Board of India for allegedly giving an unfair advantage to the brokers.

ED has put Ramkrishna under arrest in PMLA. The central agency approached a Delhi court sought her custody. She was lodged in prison in CBI co-location case.

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