The Central Bureau of Investigation (CBI) on Sunday arrested the former Managing Director of the National Stock Exchange (NSE), Chitra Ramkrishna, in a case registered in May 2018, to probe the alleged abuse of the exchange’s server architecture for granting preferential access of market data to a stock broker, ahead of others.
The development came days after former NSE Group Operating Officer, Anand Subramanian, was arrested by the agency in the same case. Ms. Ramkrishna, who worked with the exchange from the early 1990s, was its Managing Director and Chief Executive Officer from April 2013 to December 2016. More arrests are likely soon in the case.
On February 11, the Securities and Exchange Board of India (SEBI) had levied penalties on Ms. Ramkrishna, Mr. Subramanian, and former NSE MD Ravi Narain on account of multiple violations, including irregularities in Mr. Subramanian’s appointment as a Chief Strategic Advisor and his re-designation as the Group Operating Officer and Advisor to the then NSE MD.
Subsequently, the Income-Tax Department had also conducted searches on the premises of Ms. Ramkrishna and Mr. Subramanian in Mumbai and Chennai, while the CBI issued “look out” circulars against the two and Mr. Narain, following which their statements were recorded by the agency.
As alleged, the CBI arrested Mr. Subramanian as he did not cooperate in the probe and refused to divulge the real identity of the “Himalayan yogi” with whom he and Ms. Ramkrishna had shared internal confidential documents of the exchange during the check period. He was in the agency’s custody till Sunday. The agency found that he had allegedly created the email account, rigyajursama@outlook.com, which was purportedly used by the unknown person to communicate with the two.
According to the SEBI order, Mr. Subramanian knew the said yogi and he was a major beneficiary of the person’s purported recommendations to Ms. Ramkrishna. Prior to his appointment at the NSE, he also knew her. His wife worked as the regional head of the NSE in Chennai. In January 2013, he was offered ₹1.68 crore for the post of Chief Strategic Advisor, when his last drawn salary was ₹15 lakh. He received increments in quick succession and his compensation had shot up to about ₹5 crore by 2016.
The CBI case is against Delhi-based OPG Securities and others, including unknown officials of the SEBI and the NSE. It is alleged that the company’s top functionaries exploited certain loopholes in the exchange’s server infrastructure and also conspired with the NSE data centre’s staff to gain preferential access to the market feed.
