The flash crash on the National Stock Exchange on Friday, which led the Nifty to slump by 900 points (more than 15 per cent) and the market to shut for 15 minutes, has become a political issue. The Nationalist Congress Party (NCP) and the Opposition BJP in Maharashtra have demanded a CBI inquiry into the incident, caused by an erroneous trading order punched by a broker at Emkay Global.
NCP spokesman Nawab Malik said a CBI probe was essential to find whether there was a "conspiracy to destabilise the economy, which was looking good after the recent reform measures announced by the UPA government". The crash, which halted trade on the NSE, might have impacted small investors adversely, he said.
The BJP, which usually disagrees with everything the NCP does or says, was quick to agree with the view. Vinod Tawade, the BJP's leader of the Opposition in the Maharashtra Legislative Council, also made a pitch for a CBI probe. He dared anti-corruption crusader Anjali Damania, who exposed the multi-crore irrigation scam in Maharashtra, to support the CBI inquiry into Friday's crash. Tawade's demand is crucial as Anjali Damania's husband, Anish Damania, is head (institutional equity) at Emkay Global.
Damania had shot into the limelight after she announced her move to reveal proof about a business partnership between Union Agriculture Minister Sharad Pawar and BJP President Nitin Gadkari. Tawade opined Damania should extend her support for a CBI inquiry into the crash.
Observers said the BJP's reaction was predictable as the party was finding it difficult to defend Gadkari for his alleged proximity with irrigation contractors in Maharashtra and also for his recent letter addressed to Union Water Resources Minister Pawan Kumar Bansal requesting early release of funds for the Gosikhurd irrigation project in the Vidarbha region.
When contacted, Anjali Damania said, "Please do not mix up the two issues. My fight against the irrigation scam and Friday's crash are separate issues. It was a freak trade and the market regulator Sebi is inquiring into the crash." Prakash Kacholia, promoter of Emkay, did not comment, saying he was busy with meetings.
The NSE said, "The market circuit filter got triggered due to the entry of 59 erroneous orders which resulted in multiple trades for an aggregate value of over Rs 650 crore. While the exchange systems functioned normally without any glitch, the abnormal trades caused market closure automatically due to the index circuit filter getting triggered."