Confirming the development, a senior income-tax department told Business Standard that searches were being carried out by the Delhi income-tax department in coordination with the Mumbai team.
He said: “The searches are to find out the beneficiaries of the alleged irregularities and to look for the evidence of illegal gratifications received by brokers for the benefit their actions passed on to beneficiaries.”
“The searches are going on since yesterday and will continue for two more days,” the offcial added.
Sources said that the action had been initiated by the department after getting approval from the highest authorities of the finance ministry. The tax department will investigate all those persons who have been named in the showcause notice (SCN) issued by market regulator Securities and Exchange Board of India (Sebi).
On May 22, Sebi had served SCNs to NSE and 14 of its current and former key management personnel for alleged irregularities at its colo facility. The trading systems used by NSE at its colo facility were prone to manipulation that allegedly gave preferential access to select brokers.
NSE has already replied to the SCN issued by Sebi. An email sent to NSE has not elicited any response yet.