The Lokayukta’s clean chit to Karnataka Chief Minister Siddaramaiah in the alleged MUDA land scam has triggered a political slugfest, with the BJP alleging that the state government handpicked the officers investigating the case and the Congress hitting back and saying that the issue was politically motivated.

The Lokayukta on Thursday submitted an 11,000-page closure report to the Special Court for MLAs and MPs in Bengaluru in the Mysuru Urban Development Authority (MUDA) case against Siddaramaiah, his wife BM Parvathi, brother-in-law Mallikarjunswamy and landowner J Devaraju. The allegation is that Siddaramaiah’s wife was allotted 14 sites in Vijayanagar Layout, an upmarket area in Mysuru, as compensation for the use of 3.16 acres of land in Kesare village near the city. An anti-corruption activist had complained that this had caused a loss of Rs 45 crore to the state.

Siddaramaiah has maintained that there was no wrongdoing in the transactions, asserting that the plots were gifted to his wife by her brother. 

Writing to one of the complainants, the Lokayukta had said on Wednesday that there was not enough evidence to conduct an investigation against Siddaramaiah and the charges seemed civil in nature and not “suitable for criminal charges”.

The BJP has said it has faith in the Lokayukta but insisted that the investigation was not conducted properly. 

Union Minister Pralhad Joshi said, “We have full confidence in the Lokayukta, whereas the police officers who have investigated have been transferred, appointed, given postings by the same Siddaramaiah. We cannot expect a fair inquiry and this is an eyewash. If Siddaramaiah wants to come clean, he should hand over the case to the CBI, otherwise a high court-monitored investigation should be done.”

The Congress, however, hit out at the BJP and accused it of being okay with Lokayukta orders or rulings as long as they were in its favour.

“I had said in the beginning itself, when BJP and Janata Dal (Secular) did their padayatra from Bengaluru to Mysuru, that it (allegation) is politically motivated. His (Siddaramaiah) signature was not there, he had nothing to do with it. His family had lost the property and had asked for a claim, everyone does that whether it is me or you, and he was given (alternative sites). There was no demand for allotment in a specific place,” Deputy Chief Minister Shivakumar was quoted as saying by news agency PTI. 

“There should be evidence to file any case, but in this case there was no evidence. Lokayukta have done their duty, if they (complainants) have any objections, let them fight (legally)… Lokayukta is not just the police, it is an independent body, the Chief Minister has no control over it. If any official has to be appointed to the body, it is only after taking the approval of the Lokayukta,” he added. 
 

New Delhi:

The CBI has given a clean chit to former Mumbai police commissioner Sanjay Pandey’s company as well as officials from the market regulator and the stock exchange in a case of alleged irregularities in the audit of high-risk brokers. 

The agency had, in May 2022, registered a corruption and cheating case against iSec Services Pvt Ltd and officials from the Securities and Exchange Board of India (SEBI) and National Stock Exchange of India (NSE). They were accused of violating the rules while conducting audits of high-risk brokers M/s SMC Global Securities Ltd and M/s Shaastra Securities Trading Pvt Ltd between 2012 and 2019.

As per SEBI rules, traders using the controversial ‘co-location’ facility were categorised as high-risk traders since they were using algorithmic trading, and they were to be audited every six months. The rules stipulate that the security and system audit of the brokers must be done by different auditors, and an auditor can perform a maximum of three successive audits of a broker.

The CBI had alleged that Sanjay Pandey’s firm, iSec Services, conspired with some officials of NSE and SEBI and audited both the high-risk brokers continuously for years, violating the rule of a maximum of three successive audits.

iSec Services audited M/s Shaastra Securities Trading Pvt Ltd from 2013 to 2019 and M/s SMC Global Securities Ltd from 2012 to 2015.

In some instances, iSec Services deployed employees “who are not qualified to carry out system audits” to audit these high-risk brokers and, on more than three occasions, audit reports were signed by people who never visited the premises of the stockbrokers, the CBI had alleged in 2022.

“After investigating the case for over a year, CBI has closed the case for want of evidence”, a source told NDTV.

Mr Pandey, who retired as the Mumbai police commissioner on June 30, 2022,  was arrested by the Enforcement Directorate in July that year in a money laundering case involving iSec Services Pvt Ltd. 

M/s SMC Global Securities Ltd and M/s Shaastra Securities Trading Pvt Ltd are also under investigation in the ‘co-location scam’ being investigated by the CBI, ED and SEBI.

A Deloitte report, which formed the basis of investigation by the agencies, had alleged that the high-risk brokers – including these two stockbrokers – exploited NSE systems for early log-in advantage and made profits worth thousands of crores between 2010 and 2014. 

SEBI had also imposed a penalty of Rs 1,000 crore on NSE in the co-location case.