June 19: Tax sleuths swooped down on commodity traders in Mumbai and five other cities but there was a stony silence over what prompted the crackdown on the Multi Commodity Exchange of India (MCX) which specialises in futures trading in metals, agri-commodities, and oil and gas.

The finance ministry confirmed that the income tax department had conducted raids on a commodity exchange — it didn’t name the MCX — and its associates in Mumbai. Surveys are being conducted on its branches in Calcutta, Ahmedabad, Bangalore, Chennai and Delhi, it added.

The MCX sources, however, claimed that the tax officials had visited only their Mumbai office. In an attempt to ensure that stock markets weren’t spooked by the raids, the finance ministry said, “There has been no search on any share broker.”

The other commodity exchange — the National Commodities & Derivatives Exchange — put up a notice on its website rubbishing rumours that it had also been raided.

Joseph Massey, deputy managing director of the MCX, said the tax officials had carried out a routine investigation at the MCX office in Mumbai and claimed that the exchange had complied with all the rules and regulations.

A spokesperson for the MCX later told The Telegraph that no searches had been conducted at any of the commodity exchange’s other offices in the country. He also denied speculation that the residence of Jignesh Shah, managing director and CEO of the MCX, was searched. “Searches were only conducted at the Mumbai office. The tax officials went through the computer and other records of some officials,” sources said, adding that the sleuths were looking to reconcile the accounts of brokers and their clients.

Just yesterday, the MCX had sought details from its members about their clients who had logged trades of more than Rs 1 lakh between January and March and were based in Mumbai. Exchange officials said this was a routine circular and that it was issued every quarter. However, some reports said the directive had been issued on the orders of the income tax department.

The crackdown comes after weeks of fulmination by politicians who have been blaming futures trading for the surge in commodity prices and the growing spectre of inflation that the government hasn’t been able to bring under control.

Some political groups have been demanding a ban on futures trading in commodities, which the trading community sees as an extremely harsh measure.

On the MCX, all the futures contracts except sugar were trading at a loss, but brokers refused to acknowledge that this was a result of the raids.