NSE co-location scam: The story so far

NEW DELHI: A financial scam, a governance mess and a mysterious "himalayan yogi" are few of the top elements that the National Stock Exchange (NSE) co-location case highlighted.


Former managing director (MD) and chief executive officer (CEO)

Chitra Ramkrishna

-- now under CBI custody -- is getting the Sebi rule book, that she had once written -- thrown at her.

Even the NSE has been caught in this governance mess as a report by Sebi alleged Ramkrishna shared the bourse's internal matters with an unknown person -- the Himalayan yogi. Ramkrishna claimed that the 'yogi' to be her mentor.

Here's how the story has unfolded so far:
* Chitra Ramkrishna is the former chairperson of NSE and has been accussed of allegedly providing confidential company information to an unidentified spiritual guru. She shared NSE's five year projections, financial data, dividend rtion, business plans, board meeting agendas.

* Investigations by Sebi revealed that this spiritual person was the reason why Anand Subramanian -- an unknown mid-level official at some other company -- suddenly became Ramkrishna's principal advisor between April 2015 and OCtober 2016. The appointment was made by overlooking the prescribed due procedures at NSE.

* Thereafter, she, in conspiracy with Subramanian, influenced the officials of NSE to facilitate him in having access to important decision-making processes of the NSE. During the same period, M/s OPG Securities was gaining undue advantages in NSE by logging into the secondary server.

* The investigation has also revealed that Ramakrishna facilitated providing confidential trading data to Infotech Financial Services and to Ajay Shah, knowing fully well that Infotech Financial Services was providing algorithmic software to brokers in NSE and that there was a conflict of interest since one of the directors of M/s Infotech Financial Services, it said.

* On March 6, the CBI arrested Ramkrishna in Dehi after questioning, during which she allegedly remained evasive.

* On March 7, the trial court had sent former managing director and chief executive officer of National Stock Exchange Chitra Ramkrishna to seven-day CBI custody in connection with the case, saying her custodial interrogation was required for fair and proper investigations.

* Special Judge Sanjeev Aggarwal pulled the CBI for tardy investigation and said that if such scams keep happening then India will lose its creditbility and investors will move to China.

* Former group operating officer (GOO) of NSE Anand Subramanian has also been sent to 14-day judicial custody in connection with the case.

* The Delhi court has also questioned Sebi's role in the entire scam and said “You did not take him to the scene of the crime. You are sitting here in the CBI office. You can relax. What about the role of Sebi? It is a capital market watchdog. Does it only growl or can it bite also?.”

* The court also questioned the agency on treating the accused “gently” and observed that Ramakrishna had come to the CBI office and “was served coffee and later arrested”.


(With inputs from agencies)