THOU SHALL MISJUDGE: SEBI'S COLOCATION VERDICT

When all the investigation reports that confirm the misuse of the NSE's colocation trading architecture is put to the test of Preponderance of Probability, or indirect proof, along with the emails of Chitra Ramkrishna, Ravi Narain, OPG Securities and the Jagdish Joshi and Nagabhushan factor, there is evidence of a perfect scandal

- Palak Shah

IN ITS COLOCATION scam verdict, the Securities and Exchange Board of India (SEBI) has ignored legally admitted facts and investigation reports that indicated connivance of National Stock Exchange (NSE) officials with brokers. Names of key conduits were dropped from the Show Cause Notice (SCN), which could prove connivance beyond doubt, via the test of 'Preponderance of Probability'. Hence, SEBI's verdict in the matter is perverse and corrupted by twisted narratives and logic that defeats the Supreme Court's (SC) landmark orders.

Preponderance of Probability is a legal standard used in civil cases that means that a fact is more likely to be true than not. It's a lower standard of proof than "proof beyond reasonable doubt", which is used in criminal cases. The SEBI uses the test of Preponderance of Probability in most of its cases to punish the guilty. But when it came to the NSE colocation scam, the regulator chose to ignore the test.

In its ruling on the Kishore R. Ajmera case the Supreme Court had said: "In the quasi-judicial proceeding before SEBI, the standard of proof is Preponderance of Probability (in absence of direct evidence)." The SC further said, "It is a fundamental principle of law that proof of an allegation levelled against a person may be in the form of direct substantive evidence or, as in many cases, such proof may have to be inferred by a logical process of reasoning from the totality of the attending facts and circumstances surrounding the allegations/charges made and levelled. While direct evidence is a more certain basis to come to a conclusion, yet, in the absence thereof the courts cannot be helpless."

In the NSE colocation case, there is indirect proof or ‘Preponderance of Probability’ galore on NSE officials helping brokers cheat.

The Scandal is Legal