Bhave was examined in Bangalore by a team of CBI officers two months after the agency registered a preliminary enquiry (PE) against him, another former member KM Abraham and FTIL and MCX, among others.
The PE was registered for alleged irregularities in granting sanction to the MCX Stock Exchange (MCX-SX) by Sebi in 2008 and renewing the recognition in 2009 and 2010. The examination of Bhave was to ascertain how MCX-SX was granted permission despite opposition by Sebi when he was head of the regulatory authority. His examination comes barely three days after Abraham was examined by the CBI last Friday.
Efforts to seek a reaction from Bhave, a 1975 batch IAS officer from Maharashtra cadre, were not successful. Bhave became Sebi chairman in February 2008 and his three-year term ended in February 2011. Abraham's term as a whole-time member of Sebi also ended in 2011.
It's a crazy logic. As regulators, we found there was a need to create and encourage competition. NSE was the dominant player in the currency derivatives market and BSE was unable to compete with NSE. So, by licensing a third party, in this case Shah's MCX-SX, we helped create competition. Is that a crime" Bhave had asked.