NSE scam: 11 brokerage firms and two FPIs on the radar of income tax department

MUMBAI: Eleven brokerage firms and two foreign portfolio investors (FPIs) are on the radar of the income tax department in the National Stock Exchange (NSE) scandalous co-location case. His involvement in the co-location case is being investigated by the income tax department.

It has been investigated whether some of the board members of NSE got hidden benefits in return for providing sensitive information.

Sources familiar with the case said income tax officials suspect the brokerage entities used the tax haven to buy property, finance the holiday and invest in some of the board members 'families' businesses. Investigators include Infotech Financial Pvt Ltd, which obtained trading data from the NSE to calculate the liquidity index.

Sunita Thomas, wife of Suprabhat Lala, a senior NSE official, was among the directors of Infotech Financial. According to the first report of the SEBI co-location case, Thomas was also the sister-in-law of Ajay Shah, another NSE official. He was also a market economist. Infotech played a key role in awarding the contract to Financial, which he then misused to gain commercial advantage.

Tax authorities are examining the overseas travel information of people involved in the NSE co-location case to obtain information on suspected brokerages and foreign investors.

The Income-tax department is also investigating the transactions made by three other NSE functionaries - including Ravi Varanasi, the then head of business development at NSE, Devi Pravas Singh, co-location support head and Nagendra Kumar. The three were targeted by Sebi for allegedly colluding with two other brokerage firms other than OPG Securities to provide them with unfair advantage in the market.