ED summons former Mumbai CP Sanjay Pandey in connection with NSE co-location scam

ED summons former Mumbai CP Sanjay Pandey in connection with NSE co-location scam

The summons were sent on Saturday to Pandey, who retired from the police force on June 30, the ED official added.

Somendra SharmaUpdated: Sunday, July 03, 2022, 11:26 PM IST
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ED summons former Mumbai CP Sanjay Pandey in connection with NSE co-location scam | PTI

Enforcement Directorate (ED)'s Delhi unit has issued a summons to former Mumbai Police Commissioner, Sanjay Pandey, asking him to appear before them in Delhi on Tuesday (July 05) in connection with the agency's ongoing probe related to the NSE co-location case. Pandey, a 1986 batch IPS officer retired from service on June 30.

Pandey did not respond to the calls and messages seeking his response.

According to the summons issued on Saturday, a copy of which was accessed by FPJ, stated Anil Kumar Monga, Assistant Director, ED, was making an investigation under the provisions of the Prevention of Money Laundering Act and considered the attendance of Sanjay Pandey necessary in connection with the said investigation.

Pandey has been asked to appear before ED's Delhi office on July 05 and record his statement in connection with the investigations of the case.

Co-location is a set-up wherein the broker's computer is located in the same area as the server of the Stock Exchange. This particular set up of servers gives a speed advantage to the brokers availing the co-location facility in comparison to other brokers. Till 2014, information was disseminated by exchange server to the brokers attached with co-location facility through TBT-based system architecture. In this architecture, data was disseminated in a sequential manner whereby stock brokers who connected to servers with lesser load would gain an unfair advantage.

In April this year, ED carried out searches at multiple locations in Delhi and Gurugram in connection with the co-location scam case.

An IT firm founded by Pandey is reportedly under the Central Bureau of Investigation (CBI) scanner for allegedly not red-flagging NSE server breach in the co-location scam being investigated by CBI. The said firm was one of the IT companies tasked with conducting security audits at NSE from 2010 to 2015 when the co-location scam is suspected to have taken place.

On May 28, 2018, the CBI registered a case of criminal conspiracy, attempt to give and receive a bribe, misuse of official position and destroying evidences against the owner and promoter of a New Delhi-based private company, unknown officials of the SEBI and the NSE, Mumbai and other unknown persons. Following this, the ED launched a money laundering investigation into the case.

According to the CBI, it was alleged that the owner and promoter of the said private company abused the server architecture of the NSE in a conspiracy with unknown officials of the NSE. It was also alleged that unknown officials of the NSE, Mumbai, had provided unfair access to the said company using the co-location facility during the period 2010-2014 that enabled it to log in first to the exchange server of the stock exchange, helping it get the data before any other broker in the market.

The CBI had earlier arrested former CEO and MD at the NSE Chitra Ramkrishna and her advisor and former Group Operating Officer (GOO) Anand Subramanian and Sanjay Gupta, managing director of OPG Securities in the co-location case.

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