"Sanjay Gupta was called for questioning at CBI headquarters and he complied with our request. Other accused have also been asked to join the probe," said a senior CBI officer.
In a sensational case of misuse of co-location facilities of the National Stock Exchange (NSE) by select brokers, the Central Bureau of Investigation (CBI) has questioned one of the main accused Sanjay Gupta, owner of Delhi based OPG Securities Pvt Ltd, and issued summons to other accused to join the probe.
"Sanjay Gupta was called for questioning at CBI headquarters and he complied with our request. Other accused have also been asked to join the probe," said a senior CBI officer.
CBI has alleged that Gupta abused the server architecture of NSE in criminal conspiracy with unknown officials of the stock exchange. In a corruption case against unknown officials of National Stock Exchange (NSE), Gupta and others, CBI stated that accused were given illegal access to NSE server data that allowed the accused to get market rates much before any other brokers in the country.
Apart from Gupta, Aman Kakrady, brother-in-law of Gupta, Ajay Narottam Shah, who developed Algo software Chankaya and gave it to Gupta, and against unknown officials of Securities and Exchange Board of India (SEBI) and NSE have been named in the case. The agency has registered case under criminal conspiracy, various section of Prevention of Corruption Act and section 66 of Information and Technology Act.
OPG Securities is the centre of the 'co-location controversy' on the NSE, in which broker availed of the server co-location facility, got preferential access to the exchange's trading system. The controversy is that the brokers had somehow managed to connect to the exchange's back-up server, and hence could access the price feed faster, giving them an advantage over other brokers.
Gupta allegedly abused the server architecture of NSE in connivance with officials of NSE. "Unknown officials of NSE provided unfair access to OPG Securities to their server using co-location facilities during 2010-12 enabling first to access the exchange server of NSE. They helped to get data before any other broker in the market," CBI stated. Between 2010 and 2012, Gupta was the first to login.
A complaint was filed with SEBI. However, Gupta managed to get a favourable report from SEBI. The complaint was about abuse of the tick-by-tick architecture of NSE server. Gupta reportedly bribed some SEBI officials to get a favourable order. He allegedly directed employees to delete some important mails texts and logs, with an intention to destroy electronic evidence.
After the introduction of Load Balancer in NSE server after 2012, servers of all other brokers were connected to the primary server of NSE. However, Sanjay connived with NSE officials and was able to get access to the backup server. The backup server was with zero load therefore giving him fast access to the market feed. It helped OPG Securities get faster access to market feed ahead of other brokers.
It was also alleged that Shah, who had collected the NSE trade data in 2005-06 under the pretext of research activities, developed the software that was sold to select brokers, including OPG Securities.
Gupta with help of Aman was illegally trading in Dubai, Ghana, Singapore, Hong Kong and China through OPG.
WHY CBI ACTION
- Gupta is accused of 'abusing' the server architecture of the exchange in collution with NSE officials.
- Some exchange employees facilitated OPG access to co-location servers during 2010-12, believes CBI.
- This helped OPG obtain first access to market data, before other trading members, an official said.
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