MUMBAI : The Securities Appellate Tribunal (SAT) on Monday directed the National Stock Exchange (NSE) to deposit the bonus and leave encashment amount of its former chief executive Chitra Ramkrishna’s in an escrow account instead of the Investor Protection Fund Trust.
“We direct NSE to deposit ₹4.73 crore towards leave encashment and deferred bonus of the appellant (Ramkrishna) in an escrow account instead of depositing it in the Investor Protection Fund Trust," a SAT order said.
The tribunal said Ramkrishna should deposit ₹2 crore within six weeks.
This follows an 11 February order by the Securities and Exchange Board of India indicting the former NSE chief for various transgressions, including violating NSE’s hiring policy and leaking exchange information to an unknown third party. Apart from imposing a penalty of ₹3 crore on Ramkrishna, the regulator had directed NSE to forfeit the excess leave encashment of ₹1.54 crore and the deferred bonus of ₹2.83 crore.
NSE had clawed this excess bonus and compensation from Ramkrishna in FY20, following another Sebi order on 25 August 2020, where the regulator also levied a penalty of ₹50 lakh on NSE for irregularities in compensating Ramkrishna and former managing director Ravi Narain.
Sebi had received a letter from the finance ministry that stated Ramkrishna received about ₹44 crore during the course of her three-year stint at the exchange, of which ₹23 crore came in the last eight months of her employment. Following this, the regulator started its own independent investigation and sought clarification from NSE on the same.
Ramkrishna had challenged the Sebi order on the grounds that it is in violation of Sections 11 and 11B of the Sebi Act, 1992, because it is ‘not a remedial order but rather a penalty order’.
Sebi has no power to interfere in the autonomy and internal management of NSE; hence, the order should be stayed during the pendency of the appeal, Ramkrishna argued. Last week, SAT had granted a conditional stay on the Sebi order.
