India's federal police raided on Monday premises linked to three officials of the country's capital market regulator as part of a probe into a Ponzi scheme run by a local company, a police source with direct knowledge of the matter said.
The Central Bureau of Investigation (CBI) raided six premises of the officials who work at the Securities and Exchange Board of India (SEBI) in relation to the alleged scam by Kolkata-based Saradha Group that dates back to 2010.
It raided the Mumbai premises of three of SEBI's officials who were based out of Kolkata at the time, the police source said on condition of anonymity.
The raids were conducted at residences and offices of the SEBI officers who were based out of SEBI's Kolkata office between 2009 and 2013, Indian media reported.
Saradha allegedly collected small savings from the public in an unlicensed fund and went bust in 2013 after bad investments in real estate and media, and both SEBI and CBI have been probing the case for years.
Saradha denied at the time it was running such a fund. On Monday, SEBI did not respond to a request for comment.
The scam wiped out nearly $4 billion of deposits raised from mostly low-income Indians and has led to probes against several high profile politicians, celebrities and even police officials.
The raids come against the backdrop of heightened scrutiny of the markets regulator by New Delhi. SEBI recently faced heat from the federal government for introducing new rules on certain bonds valuations, and was also asked to beef up disclosures it makes in its annual reports.
CNBC-TV18 on Monday reported that SEBI will make amendments to the recently-issued circular on the valuation of AT-1 bonds that had drawn the ire of the finance ministry.