CBI to prosecute Ashok Chawla and Ashok Jha, two former finance secretaries, for their alleged involvement in the Aircel Maxis case.
In an unprecedented move, the government this evening granted permission to the Central Board of Investigation (CBI) to prosecute Ashok Chawla and Ashok Jha, two former finance secretaries, for their alleged involvement in the Aircel Maxis case currently being probed by the premier investigating agency.
The move caused flutter in the Mumbai financial markets, the National Stock Exchange (NSE) said in a two line note that Chawla, its chairman, had resigned following the government move. There are high chances that Chawla could now resign as the chairman of Tata Energy Research Institute (TERI) where a large number of officials and directors have rallied for his removal. A spokesperson for Jet Airways, where Chawla is one of the board members, said it had no comment to offer on the CBI move.
But aviation sources said the chances of Chawla stepping down from the board is very high. Chawla, who was also the non-Executive Chairman of YES Bank, had to step down from the post recently citing personal reasons.
Jha, also former chairman of Hyundai India and independent director on the board of various companies, did not offer any statement.
The CBI, in its supplementary charge sheet in the Aircel-Maxis case had named - along with P Chidambaram and his son Karti - Chawla and Jha in the illegal approval given to Malaysian firm Maxis to acquire the mobile phone operator Aircel. Apart from these two officers, two IAS officers Kumar Sanjay Krishnan and Deepak Kumar Singh along with Ram Sharan were also charged as accused by CBI.
Krishna is currently posted as additional chief secretary of Assam, Singh is now a principal secretary in Bihar. At the time of FDI clearance to Aircel, the by now defunct Foreign Investment Promotion Board (FIPB), Ashok Chawla was additional secretary in the department of economic affairs (DEA) while Ashok Jha was secretary.
With the sanction, the government has made it clear that it will not allow bureaucrats on the board of public sector companies or regulators in case charges are framed against them. It may also require listed private firms to remove board members whose integrity has been questioned.
Interestingly, the government move came around the time when forensic analysis showed as many as 62 broking firms having enjoyed preferential access to servers of
NSE, and not just the three that have been served show cause notices.
The three forensic audit reports were submitted by EY India Ltd, Deloitte Touche Tohmatsu India LLP and International School of Business (ISB). The case pertains to some broking firms having preferential access to NSE’s high-speed algorithmic trading platform
through its co-location service. As per the reports, the average turnover and profits of these 62 brokerages were higher during 2010-14, when they had unfair access.
Their profits dwindled when NSE strengthened its infrastructure.
The Securities and Exchange Board of India (SEBI), the market regulator, has so far issued show-cause notices to only three—OPG Securities, its associate GKN Securities and Way2Wealth Brokers Private Limited. The reports name, among others, Motilal Oswal Securities Ltd, SMC Global Securities Ltd, Religare Securities Ltd, IKM Investors Pvt Ltd, Kotak Securities, Barclays and Goldman Sachs.
SEBI is now probing if these firms violated fraudulent and unfair trade practices norms with intent. The overall default amount in the co-location scam is estimated to be Rs 50,000 crores over five years.
Read more: Aircel-Maxis Case: Ashok Chawla Resigns As NSE Chairman
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