Public CompanyHC asks CBI to probe forex derivative scam
The Orissa High Court on Thursday ordered a CBI probe into the alleged Rs 25 lakh-crore derivative scam in the foreign exchange market of the country.
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“In view of national interest involving irregularities of such huge amount due to faulty derivative contracts, we direct the CBI to make a thorough probe into the whole affair after registering a case”, a bench of the HC comprising acting chief justice I.M.Quddusi and justice Kumari Sanju Panda observed, while disposing of a Public Interest Litigation filed by a Cuttack-based businessman Prabanjan Patra in this regard.
The CBI in its preliminary investigation report filed to the HC last month said that there were prima facie evidences of violation of Foreign Exchange Management Act (FEMA) by several banks in India, which sold derivative contracts to gullible companies, exporters and importers, resulting in huge losses. The national investigating agency, however, did not name the erring banks in the report.
The Indian business houses including exporters and importers entered into derivative agreements with the banks to avoid the risk of high fluctuations of foreign exchange values. As per the contract, the banks arrange foreign exchanges to the companies at a rate agreed between them for a fixed period irrespective of the increase or decrease in the foreign currencies.