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ED probing top 50 brokers

Rakesh P Sharma & Savio G Pinto

The Enforcement Directorate is probing the sources of funds of the top 50 brokers of the Bombay and National stock exchanges and is also trying to identify their trading pattern.

According to exchange officials, the ED has been collecting the brokers' trading details for the last three months to ascertain their trading pattern and sources of funds.

The ED is trying to find out if the hawala route or other irregular channels have been used. The directorate will also look into the brokers' accounts to detect any flow of funds from corporates or overseas entities. Sources said they would be checking bank accounts also to trace the flow of money since banking channels are widely used to transfer money from one country to another.

The directorate is understood to have been compiling and collating data over the past month in tandem with other investigative agencies probing the recent stock market crisis. However, the ED will be primarily probing the money flow to find out if there was any money laundering or violation of foreign exchange regulations.

Market sources said the brokers under investigation included all those being investigated by Sebi as well as the entities related to Ketan Parekh. They said considering the amount of money that had found its way into the badla market, the enforcement agencies had reason to suspect that brokers were using slush money from abroad to fund their purchases. The probe could also go into the possible role of the underworld in the whole affair.

While the ED is working on evidence collected by the IT department in the course of its raids, it is also collecting evidence independently.

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