NSE Co-location Scam

- Sucheta Dalal is Editor of Moneylife magazine

- NSE had filed a Rs100-cr defamation case against Dalal and Moneylife

- But it withdrew after paying Rs50 lakh as ordered by the high court

- Dalal's story led to investigation by Sebi and now by CBI

- Earlier this month, CBI registered a case against iSE Services

Mumbai: "I have no idea why I am being targeted or what is the connection," noted journalist Sucheta Dalal, who was called by the CBI to New Delhi to record her statement on the co-location scam on July 16, told Bizz Buzz. At present, Sucheta Dalal is working as the Editor of Moneylife magazine. The credit of breaking the story on co-location scam at NSE goes to her. Her statement was recorded by CBI recently.

"I was called to New Delhi to record my statement on the co-location scam on July 16, 2022, because I was the person who had broken the story in June 2015. The co-location scam is being investigated by the Central Bureau of Investigation (CBI)," she said.

For the record, the National Stock Exchange (NSE) had filed a Rs100-crore defamation case against Dalal and Moneylife, which they withdrew after paying Rs50 lakh as ordered by the high court. Subsequently, Sebi's long-drawn investigation has repeatedly proven wrongdoing at

the NSE after multiple investigations.

Even earlier, Abhinav Khare, SP, CBI, who is investigating the scam and Pushpal Paul, DSP, CBI, had contacted her to seek information.

Just before the New Delhi meeting, she was told that they wanted to record her statement before Paul. On asking Khare, he had told Dalal that it was about 'Ken Fong'. This is the name used by the whistle-blower, whose email to Sebi, copied to Dalal, was first reported by Moneylife in 2015 and led to the investigation by the Securities and Exchange Board of India (SEBI) and now by CBI.

"Indeed, most of the questions asked by the CBI were about Ken Fong's four letters. I had carried all the four letters posted by Ken Fong to me from two different countries and showed CBI copies of my emails to Sebi before publishing the first article. These are all part of official legal records in the Rs100 crore defamation suit filed against me and Moneylife by the NSE, which was subsequently withdrawn," she said. She was asked if she knew who Ken Fong was. "I do not know who he is and I said so emphatically. I was also asked about the process which we followed before writing the article and the decision to publish it. And whether I had asked to visit the NSE before writing the article," she says.

She said: "I pointed out that co-location trading happens in highly sophisticated computers and there would be nothing for me to see from the outside. The decision to publish it was entirely mine after following the usual journalistic process of trying to verify the truth."

Apart from this, she further adds: "I was asked if I knew Sanjay Pandey, former Commissioner of Police, whose firm, iSec Services Pvt Ltd, is under the scanner. I answered that I did indeed know Sanjay Pandey since about 1994-95, when my junior at the Times of India, Somasekhar

Sundaresan, used to report extensively on the cobbler scam for the Business Times section when I was the Financial Editor. I have indeed known Mr Pandey since then, as have most journalists in Mumbai.

She further said: "I categorically stated that I have nothing to do with Mr Pandey and his business deals, specifically his dealings with NSE under the management of Ravi Narain and Chitra Ramkrishna, under whom the co-location scam happened."

She was also asked if she knew Ravi Narain, former Managing Director of the NSE. "I responded that I had known him from the time NSE was started (which was around 1992) since I have been reporting extensively on the capital market for 35 years," she says.

She was asked if she had introduced Pandey to Narain. "I told them I have no such recollection. I believe that Mr Narain has made this allegation," she said.

Dalal goes on, "I said that I did not see why NSE or Ravi Narain would need a recommendation from me when Sebi had asked Mr Pandey to investigate the National Securities Depository Ltd (NSDL) in 2005. NSDL is a subsidiary of NSE. Later NSE itself had asked him to be part of an investigation committee with regard to a trading glitch."

Earlier this month, the CBI had registered a case against iSE Services and its then officials including the directors.

I was also asked if I knew Ravi Narain, former MD of the NSE. I responded that I had known him from the time NSE was started (which was around 1992) since I have been reporting extensively on the capital market for 35 years. As a financial journalist, covering the capital market, it is basic to my job to know the heads of all stock exchanges. I was asked if I had introduced Pandey to Narain. I told them I have no such recollection. I believe that Mr Narain has made this allegation

-Sucheta Dalal