CBI starts probe against Sebi official in BoR case

CBI has started an inquiry into the role of the Chief Vigilance Officer of Sebi in connection with alleged weakening of a case against promoters of Bank of Rajasthan (BoR) which was being probed by the regulator and other suspected irregularities in the investigations.
Highly placed sources here said CBI has registered a preliminary enquiry against CVO R K Padmanabhan, a 1991-batch IPS officer from Maharashtra cadre, for alleged weakening of case against promoters of BoR which was probed by Securities and Exchange Board of India.
Email seeking Padmanabhan's response on the development and allegations related to weakening of the case remained unanswered. His office said he was out for some meeting. He also did not respond to messages and calls seeking his reaction.

A Preliminary Enquiry (PE) is an initial probe in which CBI looks for veracity of allegations and grounds for filing an FIR. No arrests or questioning is done under a PE.
It is alleged that securities market regulator did not levy adequate penalty on the promoters of Bank of Rajasthan who had made fraudulent declarations about their shares held in the company. BoR was acquired by ICICI Bank in 2010.
The sources said, on the basis of complaints received by the agency against Padmanabhan, who is also Executive Director in Sebi, CBI has decided to carry out a preliminary enquiry.

Sebi was probing alleged wrong disclosures made by promoters of BoR about their shareholding in the company.
Sebi had found that shareholding of promoters of BoR had increased from 46.8 per cent in June 2007 to 63.15 per cent in December 2009 whereas they had declared only 28.61 per cent shares.
It is alleged that while ill-gotten gains of the promoters by making wrong disclosures were nearly Rs 700 crore, Sebi had imposed a penalty of only Rs 30 crore whereas it should have been in the range of over Rs 2000 crore.