In a case related to corporate government lapses at National Stock Exchange (NSE), the CBI has intensified its probe and according to reports, the government has also swung into action to investigate the issue. Here's what happened so far in 10 points.
Finance Minister Nirmala Sitharaman said the government is looking into lapses that had happened at the country's biggest bourse.
- The Central Bureau of Investigation (CBI) has questioned the former CEO of NSE Chitra Ramkrishna and her adviser as part of an investigation into suspected corporate governance lapses. The CBI officials have also visited market regulator SEBI's (Securities and Exchange Board of India) office to collect documents related to the case, news agency Reuters reported.
- The action is the latest sign the CBI is stepping up its investigation of a 2018 case involving allegations the NSE provided some high frequency traders unfair access to speed up algorithmic trading. The additional scrutiny risks further delaying a listing plan of NSE.
- Earlier, the CBI had also issued look-out circulars against Chitra Ramakrishna and two top former exchange executives, expanding its ongoing probe into a case of preferential access to NSE’s algo-trading platform.
- The intensified police probe follows a 11 February order by SEBI that highlighted corporate governance lapses at the exchange. It said Ramkrishna over the years shared confidential NSE data and sought advice from an outsider she described as a "Himalayan yogi". The SEBI order said the former CEO "arbitrarily" appointed Subramanian as her adviser, adding he had "no relevant experience".
- NSE has said it is "committed to highest standards of governance and transparency", calling the issue "almost 6-9 years old". Ramkrishna told SEBI during the probe she did not compromise integrity of the exchange.
- The latest regulatory order is another major setback for the NSE that has struggled to roll out its IPO for years, having already been marred by allegations of governance lapses and technical glitches. The NSE denies any wrongdoing.
- The regulatory order said Ramkrishna - who quit as CEO in 2016 - was "merely a puppet" of someone she described as an unnamed yogi in Himalayas who "would manifest at will". SEBI has said the former CEO made "incorrect and misleading submission" about existence of a yogi.
- The so-called algo scam involved certain brokers getting unfair advantage over others while accessing NSE’s algo-trading platform, thereby making undue gains or avoiding losses. The investigation happened after a public interest litigation (PIL) was filed in the Delhi high court in August 2017 by journalist Shantanu Guha Ray, who demanded the agency widen the scope of its investigation into allegations of fraud and illegality into algo-trading.
- In May 2019, CBI submitted a status report to the Delhi high court that its probe was no longer limited to the original complaint. In a written response to the Parliament in July last year, the government said the CBI investigation was still on. Recently, the agency also submitted a status report on the probe to the high court.
- The NSE, started in 1994, says it is the world's biggest derivatives exchange in terms of total number of contracts traded. Ramkrishna joined NSE in the early 1990s and is credited for much of what the exchange stands for today.
