Government as well as Securities and Exchange Board of India (SEBI), the Regulator for Securities Market in India, has received complaints from whistleblowers at Metropolitan Stock Exchange of India Ltd. (MSEI) regarding irregularities and fraud of different nature.

Complaints from two whistleblowers have been received highlighting, inter alia, issues relating to governance, mismanagement, flouting of rules/laws, personnel related issues and on siphoning/misappropriation of funds at MSEI, the quantum of which is not yet ascertained. In their complaints, the whistleblowers have levelled allegations against officials of the exchange which include MD and CEO. Allegations have also been levelled against brokers.

The complaints have been examined in detail by SEBI and as an interim measure, directions have been issued to the Governing Board of MSEI, inter alia, to constitute a Committee of Public Interest Directors (PIDs) to examine all the allegations levelled by whistleblowers against the management of MSEI, and based on the recommendations of the Committee of PIDs, to take suitable action against the entities/persons found to be involved in the malpractices. MSEI has engaged the services of forensic auditor for the purpose of examination, including on assessing the actual magnitude of fraud. Allegations against brokers are separately looked into. Further, the MD & CEO of MSEI has been directed to proceed on an indefinite leave to ensure fair and uninterrupted examination of the charges levelled in the complaints of the whistleblowers.

This was stated by Shri Pon. Radhakrishnan, Minister of State for Finance in a Written Reply to a Question in Lok Sabha today.

Regulatory intervention: Order to constitute PID committee and conduct forensic audit after whistleblower allegations at exchange. As an interim measure, directions were issued to the Governing Board to constitute a Committee of Public Interest Directors to examine all whistleblower allegations and recommend suitable action; the exchange has engaged a forensic auditor to assess the magnitude of alleged fraud, allegations against brokers are separately investigated, and the MD & CEO has been directed to proceed on indefinite leave to ensure an uninterrupted examination.