Supreme Court Directs CBI To Investigate Role Of RBI, SEBI In Scam

CBI to probe RBI, Sebi for turning blind eye on Ponzi scams: SC--- Business Standard
14th Fab 2015

It has directed the CBI to investigate the role of market regulator Sebi and the RBI for effecting a mechanism

The apex bank and the markets regulator have now come under the Ponzi scam scanner. The Supreme Court on Friday directed the Central Bureau of Investigation (CBI) to probe the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi), saying these regulatory bodies cannot turn a “blind eye” to the multi-crore chit-fund scam across several states.

“We have directed the CBI to investigate the role of market regulator Sebi and the RBI for effecting a mechanism. If the regulator turns a blind eye, it needs to be investigated. There is nothing which remains outside the scope of the investigation,” a Bench of judges T S Thakur and Adarsh Kumar Goel said.

 The Bench referred to its May 9 last year’s order, directing the agency to probe the duping of thousands of people of over Rs 10,000 crore through several Ponzi schemes in West Bengal, Odisha and Assam.

 So far, three Trinamool Congress (TMC) functionaries — West Bengal Transport Minister Madan Mitra, TMC Member of Parliament Srinjoy Bose and Kunal Ghosh — have been arrested in the Saradha chit-fund scam. CBI had also questioned senior TMC leader and former railway minister Mukul Roy in the case.

 The apex court, while disposing of a public interest litigation seeking a direction to CBI to probe the Rs 700-crore Ponzi scheme involving firms other than Saradha in West Bengal, said: “We have made it clear to CBI that it will have to investigate the cases which have been transferred to it.” It asked senior advocate Shekhar Naphade, appearing for petitioner Subir Dey, to withdraw his plea and file a representation with CBI.

 During the hearing, the Bench said CBI had earlier submitted that it lacked manpower to handle all such cases. “We have already told the CBI that unless it seeks modification, it will have to investigate the cases which have been transferred to it,” the court said.
 In a setback to West Bengal’s ruling party TMC, the court recently declined to monitor the CBI probe into the multi-crore rupee Saradha scam, saying it has not made any accusation that the agency was “negligent” in its probe.