CBI working with crazy logic: Bhave

He also accused CBI of indulging in 'pick and choose' while registering a Preliminary Enquiry against him

Hitting back at the Central Bureau of Investigation (CBI) for launching an inquiry against him on the basis of an already disposed-of income tax probe, former Securities and Exchange Board of India (Sebi) chief C B Bhave says the agency is working with “crazy logic” and had ignored the fact that the tax department itself found no merit in the case years ago.

Hinting at revelations from his side in the days to come, Bhave also accused the CBI of “pick and choose” while registering a preliminary enquiry (PE) against him and another former senior official of Sebi. A former Maharashtra cadre IAS officer of the 1975 batch, Bhave further said the CBI must probe him if it has any evidence. But, CBI would have to “publicly apologise” to him for tarnishing his reputation if it finds no substance, he said in an interview.

When asked whether actions taken by Sebi against Sahara and other corporate entities during his tenure could be linked to the present case, Bhave said, “I have no idea and there is no way of knowing unless they (CBI) share something with us. Whatever I know is from newspaper reports. They have not shared anything with us and have not contacted us yet.”  The PE has been registered on the grounds that Sebi granted a licence to MCX Stock Exchange (MCX-SX) in 2008 and renewed it during subsequent years despite an income-tax department probe against the applicant entities.

Asked for his comments on CBI Director Ranjit Sinha’s reported remarks that the agency had only registered a PE, Bhave retorted, “They are saying there are no raids or arrests yet. Should we wait to get raided and arrested?” Bhave, who served as Sebi chairman for three years till mid-February, 2011, said “CBI chose to ignore the fact that the I-T department found no merit in its probe against Jignesh Shah. Yet, CBI chose to file a criminal PE against me.”

On CBI’s assertion that Shah was given undue benefits by grant of a licence, Bhave said, “It’s a completely crazy logic that CBI has” because the licence did not lead to any profits and it was rather granted to create competition.

Bhave has been credited with several path-breaking orders and decisions taken by the capital markets regulator and the CBI move against him has already evoked sharp reactions from many former bureaucrats including ex-CAG Vinod Rai, as also by Union minister Jairam Ramesh.

The CBI registered a PE against Bhave, Sebi’s former whole-time member K M Abraham, as also against the Shah-led Financial Technologies (India) (FTIL) and Multi Commodity Exchange (MCX) last week in a case related to the grant of licence to MCX-SX in 2008.

MCX-SX, which was set up by FTIL and MCX, was initially given a licence to operate in currency derivatives in 2008, but Sebi refused permission to allow it to act as a full-fledged bourse for years as it was not found to be in compliance with existing norms for the same.  Incidentally, it was Abaraham’s order in September 2010 that rejected MCX-SX application for a full-fledged exchange, saying it was not in compliance with shareholding norms and it was not a ‘fit and proper’ entity for such a business.

CBI going after wrong people, says Parekh
Coming out strongly in support of Sebi’s former chief C B Bhave, eminent banker Deepak Parekh on Wednesday said the probe against such “upright” public officers would further vitiate the decision-making environment in the country. Parekh said he was “very saddened to read that CBI was going after Bhave and Abraham”. “I have known Bhave for a long time and I can say that you cannot find a more upright person. He is a person who walks as straight as a straight line. He is a person of high integrity,” Parekh said.