Former finance minister P Chidambaram, who is in judicial custody at Tihar in INX Media case, may be investigated for his role in the NSE co-location scam. According to Jignesh Shah, Chidambaram should be probed for his role with the NSE. Shah says that Chidambaram wanted to protect National Stock Exchange (NSE) from the competition posed by his venture- National Spot Exchange Limited (NSEL). Shah has been called ‘India’s Exchange Man’, as he had launched 14 exchanges across six continents so far.
Shah said the NSEL has got license for stock exchange and posed threat to dominance of NSE, which according to him, had become the “pet exchange” of Chidambaram. “We were number one in commodities trading, electricity, currency, bonds and in everything we were doing and we had got the licence for a stock exchange where the NSE had a dominance,” said Shah.
“They wanted to eliminate us (NSEL) from the exchange space because we were the only competition to their pet exchange (NSE),” he added. He (P Chidambaram) called the NSE co-location scam (came out in public in 2013) – a “super white-collar crime” and asked for probe in Chidambaram’s ‘interest’ in National Stock Exchange and his role in scam.
P Chidambaram appointed Ajay Shah on the working group of financial services, foreign investment and internal debt management, in the finance ministry. Ajay Shah collected trader data from National Stock Exchange (NSE) in the name of research activities and developed software.
Later he sold this software to a few selected brokers who rigged NSE’s algo-trading to get market related information earlier than others. It was called the NSE-co location scam and the Central Bureau of Investigation (CBI), the Securities and Exchange Board of India (SEBI) and the Income-tax Department (I-T department) are currently investigating NSE insiders like Ajay Shah who are primary suspects.
Previously, Ajay Shah, director and owner of Centre for Monitoring Indian Economy (CMIE) has been barred from associating with all SEBI recognized entities for 2 years in NSE co-location scam.
As per the SEBI order, “It was observed that these persons, with active support of NSE and its senior officials have misused the confidential and sensitive data provided by NSE for being used in the LIX project, to develop algorithmic trading software for sale in the securities market, thereby compromising the integrity of securities market.” Infotech financials, the company which sold the software to brokers is run by Krishna Dagli and Sunita Thomas who happens to be the wife of Ajay Shah.
Jignesh Shah said that through NSEL, he was challenging some “really powerful people and their money-making and money-laundering machines.”
Ajay Shah, the brain behind the NSE co-location scam has already been banned by SEBI, and is under the radar of other investigation agencies. The role of Chidambaram, the then finance minister, who appointed Shah in important government departments, is yet to be examined. It has long been suspected that Chidambaram might have misused his office to manipulate the stock market, helping select brokers to profit illegally, and in turn profiteering himself.
The list of Chidambaram’s criminal activities is getting longer and longer. He is the first finance minister of India to be jailed in the case of a financial crime. He certainly comes across as a disgrace to the sanctity to the post of finance minister. There could not be anything worse than a country’s finance minister to be involved in a finance related crime. He is also involved in many other illegalities including changing the affidavit in the Ishrat Jahan encounter, creating the myth of saffron terror, Aircel Maxis scam and 2G scam.