SEBI and its Waterloo – Part 2

BSE and NSE have cleverly tried to mask the issue and divert the attention from fraud in the system perpetrated by SEBI’s Director and Sachin Malhan to benefit SAMA

BSE and NSE have cleverly tried to mask the issue and divert the attention from fraud in the system perpetrated by SEBI’s Director and Sachin Malhan to benefit SAMA
BSE and NSE have cleverly tried to mask the issue and divert the attention from fraud in the system perpetrated by SEBI’s Director and Sachin Malhan to benefit SAMA

The previous part of the article can be accessed here Part 1. This is the second part.

Fraud really thrives in moments of great social change and transition. We’re in the midst of a technological revolution. That gives con artists huge opportunities. People lose their frame of reference for what can and can’t be realMaria Konnikova

Clarification or suppression of the truth?

On 12th July 2023, CapTable broke the story of massive allegations of fraud, deceit, and misrepresentation at the highest levels of SEBI in its article titled – Allegation of unfair selection hit SEBI-backed ODR platform[1]. The news is out since there, but very few have noticed how significant the lapse is on behalf of the Ministry of Finance, governmental agencies, and the investor at large.

On 7th August 2023, BSE and NSE come out with a clarification statement to say due procedure was followed by all of them and have gone to a great extent to defend SEBI[2]. It is highly deceitful on behalf of BSE and NSE (two of countries foremost stock exchanges) to lie to the general public, lie to the Ministry of Finance, and lastly lie to protect the interests of Pramod Rao – SEBI and Sachin Malhan of AGAMI.

PGurus is in exclusive access of materials pertaining to this issue and it can confirm that this clarification by BSE and NSE is nothing but one of suppression of the truth and one that distracts from the main issue at large – lack of proper tender and transparent mechanism.

Let’s break down every aspect of this article of Business Standard on 8th August 2023:

Clarifying the process adopted in the implementation of the ODR mechanism, the exchanges said that MIIs (market infrastructure institutions) followed the due process for the selection of vendors, which included formulating the scope for development of the ODR Portal, seeking proposals from multiple entities and final selection based on technical and commercial dimensions.

BSE and NSE are trying to dilute this whole issue in order to protect SEBI, SAMA, and their bosses – Pramod Rao and Sachin Malhan. This needs to be broken down into one simple piece of information and understanding: How does the securities online dispute resolution function? There is an underlying platform that is being built allegedly by the winner SAMA. SAMA provides the technology that powers the entire One Common Portal (OCP) for the entire industry. This selection of SAMA was done without any tender, no commercial criteria, no financial criteria, no EMD, and no qualifying criteria as well. Neither BSE nor NSE nor the other 5 MIIs nor SEBI issues any tender that is on the public record for a platform that has an impact on the entire securities markets. Instead what SEBI did was hire AGAMI as its consultant to ensure SAMA get’s the order. As of today, there is not a single publicly available document that even remotely resembles a tender on the SEBI website nor on the websites of the MIIs. But it must be said that for them to build a toilet there are 114 pages on their website.

So once the platform is built by SAMA (which it secured due to the tireless efforts of AGAMI and Pramod Rao), they then have to tie up service providers to offer the service of mediation, conciliation, and arbitration. For this aspect, the MIIs need to on-board 1-2 ODR platform service providers for which BSE and NSE need to empanel to enable them to offer the service.

Therefore there has been no tender issued by any of the MIIs in this regard.

The exchanges, further, said that capital markets regulator Sebi did not play any role in this process of vendor selection. A working group was formed comprising exchanges, depositories, ODR institutions, and AGAMI, a non-profit company, to formulate and operationalize the ODR mechanism following the issuance of a consultation paper by Sebi in December 2022, the exchanges said.

PGurus can go on record to state that the entire drive to launch this ODR platform was done by SEBI. We have access to emails to confirm that on 28th February 2023, SEBI took the initiative to set up the working group meeting at SEBI Bhawan – Room 3, Ground Floor. It is important to note that this is much more even hiring AGAMI as the consultant in March of 2023. BSE and NSE have gone again to lie to the general public and investors in this regard. According to the press release, BSE and NSE claim that SEBI was not involved at all in vendor selection. If that is the case, why is that before the process of even getting Agami on board did the AGM of SEBI issue an email communique to NSE – NSDL – SAMA and 3 other ODR platform providers with the subject to discuss: Operationalizing ADR Mechanisms in Securities Market? Why did the AGM of SEBI place on record in the mail on 28th February 2023, that Pramod Rao would be leading SEBI during the meeting along with another Director from SEBI? If SEBI wasn’t involved in vendor selection for the OCP then why did SEBI even initiate the process of engaging with SAMA much before the alleged RFP was put on May 29th, 2023?

BSE and NSE further state in a carefully worded statement: A working group was formed comprising of exchanges, depositories, ODR institutions, and AGAMI. It is again a blatant lie and suppression of truth.

PGurus has exclusive access to emails dated 16th March from the AGM which states that there was a meeting held in SEBI Bhawan on 8th of March 2023 and it was decided that the ODR Framework may be operationalized on 1st July 2023 and a Working Group be formed to operationalize ODR. Again, this was a select group of people who received the email and this included Sachin Malhan and Pramod Rao, SAMA, and 3 other ODR providers. The matter doesn’t lie just there, the AGM of SEBI at the behest of Pramod Rao follows up with the same group of people on 21st March 2023 stating clearly on record that Working Group Meetings are to be held in SEBI Bhawan II – Sixth Floor on 23rd March 2023 and that Working Group should submit their responses from the preceding meeting by 22nd March 2023.

There lies the question: If SEBI didn’t have anything to do with the entire process, why did working group meetings take place at SEBI, why did the AGM organize these meetings at the behest of Pramod Rao? Why not conduct these meetings in BSE or NSE if they are extremely sure that SEBI wasn’t involved in the process?

Why is SEBI conducting these closed-door meetings to benefit SAMA and appear to float an RFP which is a one-pager to defeat the purpose of transparency, ethics, and investor confidence?

The matter doesn’t lie there, on 23rd March AGM of SEBI at the behest of Pramod Rao sends one more mail that calls for Data from MIIs with a very specific query: Allocation of cases between the current arbitrator on the panel for the last three financial year + data as on date for the current FY? If this portal isn’t a SEBI platform or SEBI isn’t concerned at all, why are they following up?

BSE and NSE have lied to the public to state that SEBI was not involved in the working group meetings. PGurus has exclusive access to emails where the AGM of SEBI writes “pursuant to the meeting of the working group on ODR held today, it is requested the following data be submitted by MII’s and ODR institutions by EoD March 24th, 2023”, If SEBI is involved in working group meetings, then why is AGM of SEBI writing such mails? Is he writing at the behest of Pramod Rao?

It doesn’t end here, the main orchestrator of the working group meeting has been SEBI. This can be evidenced from the mail dated 31st March 2023 where the same AGM goes on record to state: The date of the next working group meeting shall be conveyed soon.

Both BSE and NSE fail to understand that the underlying platform – OCP in question has its integration with the SCORES platform of SEBI. The SCORES platform is a key integrator of the OCP. Therefore SEBI did have a critical say in vendor selection. If that isn’t the case why is the AGM going on record at the behest of Pramod Rao wanting to identify SCORES Aggregate/ Macro Data?

The next question is even more intriguing: How can an agreement between MII’s and Vendor for the OCP be ready on May 10th, 2023 even before the alleged RFP was out on 29th May 2023?

Based on the ODR mechanism defined by Sebi, MIIs– exchanges, clearing corporations, and depositories — independently envisaged a common ODR portal for receiving and allocating complaints to each of the MIIs Additionally, by the Sebi directive, each of the MIIs (BSE, NSE, CDSL, NSDL, MSEI, MCX, and NCDEX) have tied up with at least one ODR institution to facilitate the conciliation and arbitration assigned to them and currently seven ODR institutions have been onboard for implementation of ODR Mechanism. The ODR portal was rolled out after following due process effective from August 1, 2023, they added.

While the BSE and NSE and other agencies may have empanelled ODR institutions to provide the service of conciliation, arbitration, and negotiation, the selection of the vendor to develop the One Common Platform (OCP) is one of the maladies, the deceit of the highest order, and one that lacks transparency.

BSE and NSE have cleverly tried to mask the issue and divert the attention from fraud in the system perpetrated by SEBI’s Director and Sachin Malhan to benefit SAMA. There was no due process followed, no tender issued, and no criteria for selection except that a closed-door meeting in SEBI sealed the deal for SAMA.

BSE and NSE are confusing two points:

  1. Service providers to offer this service being empanelled with the 7 MIIs.
  2. Vendor selection.

While MIIs can select the service providers, the vendor to develop the underlying technology OCP is one that needs investigation by the CBI, the Enforcement Directorate, and other agencies of the land.

PGurus has exclusive access to the RFP (alleged) released by the MII on 29th May 2023 and as well as subsequent email communication from SEBI’s own consultant AGAMI to go on record to state that this ODR Portal is SEBI and a SEBI initiative.

It is highly regretful that the securities market is blissful of this development where millions of people’s data is at stake. With no EMD, no eligibility criteria, no financial criteria, and no technical criteria SEBI has sealed the fate of innocent investors and their disputes with an organization without tender to benefit: Pramod Rao and Sachin Malhan.

PGurus raised a series of questions earlier in Part 1.

1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.


[1] Allegations of unfair selection hit Sebi-backed online dispute redressal platformJul 12, 2023, The CapTable

[2] NSE, BSE clarify on ODR platform rollout; say due process followedAug 07, 2023, Business Standard

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Political Analyst, media panelist and Columnist
Ramesh Sethuraman
Latest posts by Ramesh Sethuraman (see all)


  1. So disgusting, despite so much of evidences crooks are roaming freely and luxuriously as well! Wonder how deep is the deep state!


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