WHEN CORRUPTION LEAVES NO MONEY TRAIL
[color=hsl(0,0%,0%)]There are corruption scandals where the money trail is obvious enough for investigators to follow almost mechanically. Funds leave one account, pass through shell companies, disappear offshore, return disguised as consulting fees, political donations, inflated contracts or cash moved through familiar intermediaries. Those cases leave fingerprints.
[color=hsl(0,0%,0%)]And then there is another category of corruption altogether — the kind in which money does not appear to move at all.
[color=hsl(0,0%,0%)]No suspicious transfer. No suitcase. No forged invoice. No obvious exchange of favours visible on paper. Instead, value changes hands quietly through something far more elegant and far more difficult to trace. A luxury apartment allotted at a price unavailable to the public. A commercial arrangement structured in a way that appears perfectly legal while transferring something infinitely more valuable than money itself: access.
[color=hsl(0,0%,0%)]What happened in Mumbai between 2008 and 2011 begins to look disturbingly similar.
[color=hsl(0,0%,0%)]Because during precisely those years, while India’s financial regulatory establishment was supposed to be overseeing the integrity of the country’s capital markets, a strange constellation of transactions was quietly unfolding around a Mumbai real estate developer called Kohinoor Group.
[color=hsl(0,0%,0%)]Senior executives of the National Stock Exchange (NSE) were allegedly receiving highly preferential apartment allotments inside a Kohinoor residential project in Kurla. At almost exactly the same time, Infrastructure Leasing & Financial Services (IL&FS) — years before its spectacular collapse brought India’s shadow banking system to its knees — had committed nearly ₹860 crore into another Kohinoor-linked project in Dadar. Reports that later surfaced around the NSE co-location controversy also raised uncomfortable questions regarding apartment allotments connected to senior Whole Time Members of SEBI itself, the very institution meant to regulate both these worlds.
[color=hsl(0,0%,0%)]And what emerges is not a story about one questionable transaction or one failed institution. It begins to resemble something much bigger — a tightly connected financial ecosystem where the lines separating regulator, regulated institution, financier and politically connected developer may have become so blurred that meaningful oversight had quietly stopped functioning long before anybody noticed.
[color=hsl(0,0%,0%)]The story really begins with Kohinoor.
[color=hsl(0,0%,0%)]Not because Kohinoor was merely another Mumbai developer operating in one of India’s most politically entangled sectors, but because its ownership ecosystem sat unusually close to power. Kohinoor Square in Dadar, among its flagship developments, was structured through Kohinoor CTNL Infrastructure Company, a consortium associated with Raj Thackeray through Matoshree Infrastructure and Unmesh Joshi, son of former Maharashtra Chief Minister Manohar Joshi.
[color=hsl(0,0%,0%)]In 2005, IL&FS committed approximately ₹225 crore as equity into this project. Then came the first anomaly that should have invited serious scrutiny.
[color=hsl(0,0%,0%)]WHY DID IL&FS KEEP POURING MONEY INTO A LOSING PROJECT?
[color=hsl(0,0%,0%)]Three years later, IL&FS exited that investment at an estimated loss of roughly ₹135 crore. This was prime Dadar real estate in Mumbai during one of the strongest property cycles in the city’s history, where valuations were rising aggressively and institutional investors were aggressively chasing exposure. Losing over a hundred crore in that environment was itself extraordinary.
[color=hsl(0,0%,0%)]But what followed was even stranger.
[color=hsl(0,0%,0%)]Instead of walking away after absorbing that loss, IL&FS returned and deepened its exposure to the same project, this time extending further lending until its total financial commitment eventually reached nearly ₹860 crore.
[color=hsl(0,0%,0%)]An institution first loses ₹135 crore on a real estate project in one of Mumbai’s most valuable districts and then decides not merely to stay invested, but to increase its exposure several times over. Eventually the project defaulted. Creditors absorbed losses running into hundreds of crores. IL&FS itself collapsed in 2018 under what would later become one of the largest governance failures in Indian financial history.
[color=hsl(0,0%,0%)]Yet the transaction becomes harder to understand the longer one examines it. IL&FS first entered the project as an equity investor and exited after suffering a staggering ₹135 crore loss in one of Mumbai’s most valuable real-estate markets — a market where institutional investors were aggressively chasing exposure because prices were moving almost relentlessly upward. Ordinarily, that would have ended the relationship. Instead, IL&FS returned and deepened its exposure even further, this time as lender, eventually taking total exposure close to ₹860 crore. Which creates a question that has never received a satisfactory answer.
[color=hsl(0,0%,0%)]Why does a sophisticated financial institution lose over a hundred crore on a transaction and then decide the correct commercial response is to commit several hundred crore more to the same project?
[color=hsl(0,0%,0%)]That question becomes far more uncomfortable when one looks at what was happening elsewhere in Mumbai during exactly the same years.
[color=hsl(0,0%,0%)]Because while IL&FS was sending hundreds of crores into Kohinoor-linked entities, another Kohinoor project in Kurla West was quietly becoming home to an extremely unusual group of homebuyers.
THE APARTMENTS NOBODY ELSE WAS OFFERED
[color=hsl(0,0%,0%)]In September 2008, seven senior executives of the NSE allegedly booked apartments inside Buildings 23 and 24 of Kohinoor City. These were not junior employees or ordinary staff beneficiaries of some publicly announced corporate housing scheme. These were senior management officials occupying positions at Assistant Vice President level and above inside the institution that ran India’s largest stock exchange.
[color=hsl(0,0%,0%)]The names that surfaced in reporting included R. Sundararaman, Kamala K., Yatrik Vin, C.N. Upadhyay, Mahesh Haldipur and K. Hari. The booking amount reportedly paid by each executive was roughly one lakh rupees. The reported allotment price was around ₹6,000 per square foot.
[color=hsl(0,0%,0%)]Market estimates for comparable apartments in the same period placed prevailing prices significantly higher, roughly between ₹20,000 to ₹30,000 per square foot, with some reports estimating even sharper differentials.
[color=hsl(0,0%,0%)]A private developer receiving extraordinary financial exposure from one major financial institution was simultaneously extending highly preferential residential allotments to senior executives of another institution central to India’s capital market infrastructure.
[color=hsl(0,0%,0%)]And the relationship did not stop there.
WHEN NSE ITSELF BECAME KOHINOOR’S CUSTOMER
[color=hsl(0,0%,0%)]What has received remarkably little scrutiny is that the exchange itself entered into a substantial commercial property transaction with the same developer at almost the exact same time. In 2009, reports said NSE purchased office space inside Kohinoor City in Kurla ostensibly for technology infrastructure and a near backup data centre. But the transaction immediately raised uncomfortable discrepancies. Initial reports put the acquisition at nearly 80,000 square feet for approximately ₹120 crore. Kohinoor Group’s own communication reportedly described a much larger deal involving NSE and its group entities.
[color=hsl(0,0%,0%)]NSE, however, publicly denied both the total square footage and the reported transaction value, insisting the purchase was far smaller. The exchange never satisfactorily explained why the developer and the buyer appeared to be describing materially different versions of the same deal.
WHY WAS NSE BUYING INFRASTRUCTURE IT DID NOT NEED?
[color=hsl(0,0%,0%)]More fundamentally, the rationale itself appears difficult to understand. Exchange regulations did not require disaster recovery infrastructure to sit inside Mumbai at all. In fact, separation across geographies is generally the entire purpose of redundancy architecture.
[color=hsl(0,0%,0%)]Yet NSE chose to buy expensive commercial premises from the very same developer whose apartments were simultaneously being allotted to its own senior executives.
[color=hsl(0,0%,0%)]The deals simply meant that the institution and its senior executives were both commercially transacting with the same developer at the same time.
[color=hsl(0,0%,0%)]The logic behind that acqu0isition became even harder to defend years later. In February 2021, NSE suffered one of the most embarrassing outages in its history when trading was halted for nearly four hours. Subsequent disclosures revealed that replication between the primary data centre at Bandra Kurla Complex and the near backup infrastructure at Kurla had failed. The very architecture that had supposedly justified the Kohinoor acquisition had collapsed in precisely the way disaster recovery systems are meant to prevent. Which raises a retrospective question the exchange has never answered: why was critical redundancy infrastructure placed in near physical proximity to the primary site in the first place?
[color=hsl(0,0%,0%)]DEAL DISCREPANCY
[color=hsl(0,0%,0%)]The contradictions became stranger: Kohinoor Group’s own press communication, appeared to directly contradict NSE’s public position. While Kohinoor representatives reportedly described a substantially larger transaction involving roughly 80,000 square feet and a far higher aggregate deal value, NSE insisted it had purchased only about 28,000 square feet at significantly lower cost. Instead of clarifying the discrepancy, the exchange responded aggressively and threatened legal action. For a public market institution handling investor trust, the opacity itself was extraordinary.
[color=hsl(0,0%,0%)]Later, when questions began surfacing publicly, several of the individual apartment allotments were reportedly cancelled.
[color=hsl(0,0%,0%)]But cancellations are often revealing in their own way. Because cancellations do not answer the most important question. Why were the allotments made in the first place?
[color=hsl(0,0%,0%)]This is where the story stops looking like an isolated corporate conflict issue and begins moving toward something structurally far more troubling. Because Kohinoor was not only connected to NSE executives.
[color=hsl(0,0%,0%)]SEBI APPEARED IN THE SAME ADDRESS BOOK
[color=hsl(0,0%,0%)]Around the same period, reports that later surfaced during scrutiny of the NSE co-location controversy raised questions regarding apartment allotments connected to two senior SEBI Whole Time Members — K.M. Abraham and M.S. Sahoo.
[color=hsl(0,0%,0%)]Neither official has been charged in connection with those reports. No adjudicating authority has concluded wrongdoing. That legal distinction matters. But what matters equally is what never happened afterward.
SEBI DEMANDED DISCLOSURE FROM EVERYONE EXCEPT ITSELF
[color=hsl(0,0%,0%)]SEBI, the institution that routinely penalises listed companies for non-disclosure, insider trading and asymmetric information, never publicly clarified the questions surrounding these reported allotments. No explanation was offered. No internal conflict review was disclosed. The regulator that insists transparency is the foundation of market integrity appeared remarkably unwilling to apply the same standards to itself.
[color=hsl(0,0%,0%)]Abraham’s later legal troubles make that silence even harder to ignore.
[color=hsl(0,0%,0%)]In April 2025, the Kerala High Court ordered a CBI investigation into disproportionate assets allegations against K.M. Abraham, by then serving as Kerala Chief Secretary, in proceedings involving multiple property transactions including Mumbai-linked assets. Abraham strongly denied wrongdoing, called the proceedings an act of personal vendetta and subsequently secured relief after the Supreme Court stayed the High Court’s order.
[color=hsl(0,0%,0%)]No findings have been established against him. But viewed against the unanswered questions surrounding the Kohinoor reporting, the chronology is difficult to ignore.
[color=hsl(0,0%,0%)]Abraham’s regulatory record during this period adds another layer of context worth noting.
[color=hsl(0,0%,0%)]In September 2012, acting as Whole Time Member at SEBI, K.M. Abraham passed a landmark order rejecting the application of MCX-SX — promoted by Jignesh Shah’s Financial Technologies — for permission to launch a full-fledged equity trading platform. In that order, Abraham held that the exchange had failed the “fit and proper” criteria, cited violations of ownership regulations and raised concerns regarding disclosure standards, effectively blocking what was then emerging as a serious challenger in India’s exchange business. The Supreme Court later rejected SEBI's disqualification.
[color=hsl(0,0%,0%)]The order demonstrated the extent to which SEBI, during that period, was willing to exercise extraordinary scrutiny over governance structures, beneficial ownership patterns and questions of regulatory compliance when concerns arose within market infrastructure institutions.
[color=hsl(0,0%,0%)]M.S. Sahoo served as SEBI Whole Time Member from 2005 until 2011 — precisely the years during which NSE’s controversial co-location architecture was emerging. He too has not been charged in relation to any Kohinoor-linked allegations.
[color=hsl(0,0%,0%)]But neither has there ever been institutional clarity.
[color=hsl(0,0%,0%)]And this is where the deeper structural problem reveals itself.
[color=hsl(0,0%,0%)]Because NSE and IL&FS were never operating at arm’s length from one another in the first place. Their financial ecosystems overlapped extensively. Their institutional shareholders overlapped extensively. Their leadership overlapped extensively.
[color=hsl(0,0%,0%)]Ravi Narain, the founding architect who built NSE into India’s dominant exchange, simultaneously sat inside boards across the IL&FS ecosystem including IL&FS Financial Services. Ravi Parthasarathy, who built the IL&FS empire, simultaneously occupied governance positions linked to NSE structures. LIC, SBI and HDFC sat across both institutional universes.
[color=hsl(0,0%,0%)]In effect, the institution operating India’s largest stock exchange and the institution pouring ₹860 crore into Kohinoor were not independent actors negotiating at arm’s length.
[color=hsl(0,0%,0%)]Their leadership was literally sitting inside each other’s boardrooms.
[color=hsl(0,0%,0%)]And supervising all of this sat SEBI. Except SEBI itself now appears to have existed inside the same ecosystem of relationships.
[color=hsl(0,0%,0%)]Perhaps the clearest expression of this revolving institutional door lies in one career.
THE REVOLVING DOOR BETWEEN REGULATOR AND REGULATED
[color=hsl(0,0%,0%)]C.B. Bhave spent over a decade running NSDL, deeply embedded inside NSE’s institutional architecture, before being appointed SEBI Chairman. In January 2010, under his watch, NSE quietly introduced the co-location architecture that would later become one of the most controversial episodes in Indian market history.
[color=hsl(0,0%,0%)]No public consultation paper preceded it.
[color=hsl(0,0%,0%)]No visible regulatory debate accompanied it.
[color=hsl(0,0%,0%)]The system simply went live.
[color=hsl(0,0%,0%)]India’s most important market institution quietly introduced an architecture that would later sit at the centre of one of the largest fairness controversies in Indian securities market history. And it entered the system with remarkably little visible resistance from the regulator itself. Viewed in isolation, that may simply reflect regulatory failure. Viewed against everything else surrounding NSE, IL&FS and Kohinoor during those same years, the silence begins to look far more consequential.
[color=hsl(0,0%,0%)]And at almost exactly the same time, senior NSE executives were allegedly sitting inside preferential Kohinoor allotments, Kohinoor itself was absorbing ₹860 crore of IL&FS money, Abraham and Sahoo were sitting inside SEBI, and the regulator responsible for watching the entire ecosystem appeared to be looking everywhere except where it mattered.
[color=hsl(0,0%,0%)]No adjudicating authority has formally linked these benefits to subsequent market misconduct.
[color=hsl(0,0%,0%)]That must be stated clearly.
[color=hsl(0,0%,0%)]But it is equally important to state what the public record already shows.
[color=hsl(0,0%,0%)]AT WHAT POINT DOES COINCIDENCE STOP BEING COINCIDENCE?
[color=hsl(0,0%,0%)]A politically connected Mumbai developer received ₹860 crore from IL&FS under circumstances whose commercial rationale remains deeply questionable. Senior executives of NSE allegedly received preferential apartment allotments from the same developer (some allotments were later canceled). Reports later raised questions connecting senior SEBI officials to the same project ecosystem. The leadership of NSE and IL&FS sat across overlapping governance structures while the regulator supervising both appears woven into the same network.
[color=hsl(0,0%,0%)]Perhaps every one of these facts exists independently.
[color=hsl(0,0%,0%)]Perhaps each transaction, each allotment, each institutional overlap, each silence, each unexplained decision was entirely unrelated to the others.
[color=hsl(0,0%,0%)]But there comes a point where coincidence stops being the most rational explanation. And architecture begins looking far more convincing.
[color=hsl(0,0%,0%)]The real question here is not whether one apartment allotment violated the law.
[color=hsl(0,0%,0%)]The far bigger question is whether India’s most powerful financial institutions had become so deeply interconnected that the safeguards meant to separate regulator, market participant and financial intermediary had quietly stopped functioning long before anybody realised the circuit had closed.
[color=hsl(0,0%,0%)]And inside a closed circuit, accountability rarely finds its way in.
Also Read
How CBI Buried The NSE Co-location Scam In A Grave of Incompetence And Complicity
How CBI Bungled Up The NSE Scam Probe
₹860 Crore Kohinoor Deal — Raj Thackeray’s Silence
Closure or Cover-Up? Inside the NCLAT Order On NSE Co-Location Scandal |
