The Logical Indian Crew

Financial Misleads, Faceless Yogi: Vices Of Convicted Chitra Ramkrishna, NSE's Ex-Boss

The NSE is facing accusations of giving preferential access to some brokers in the co-location facility at the stock exchange. The brokers had multiple logins to a single dissemination server through various IPs, which provided at least 15 of them preferential access.

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The Central Bureau of Investigation (CBI) arrested the former CEO of India's largest bourse, the National Stock Exchange of India (NSE), in the co-location scam related to manipulating the market stock exchange. She will now be produced in court on Monday.

The agency interrogated Ramkrishna and former NSE CEO Ravi Narain last month. At the time, the agency had arrested Anand Subramanian, NSE's former group operating officer, in the 2018 case of bourse manipulation.

Co-Location

The Co-location services meant that the NSE would allow some brokers to keep their servers within the premises. The co-location is mainly used only by institutional investors and brokers for their proprietary trader.

The NSE is facing accusations of giving preferential access to some brokers in the co-location facility at the stock exchange. The facility provides power supply, bandwidth, and cooling infrastructure for setting up servers and data storage.

According to The Indian Express report, the brokers could log on to the NSE's systems faster with better hardware specifications while engaged in algorithmic trading, which allowed them unfair access during 2012 and 2014.

Whistleblower's Complaint

A whistleblower had filed a complaint to SEBI in 2015, in which the entire modus operandi of the people running the system was laid out. The Moneylife magazine exposed the scam, following which the NSE management filed a ₹100 crore defamation suit against the media outlet.

Hearing the case, the Bombay High Court dismissed NSE's dismissed suit and directed them to pay ₹50 lakh as a penalty.

The Wrongdoings & SEBI's Penalty

The SEBI found that the company gave preferential access to some stockbrokers. The ministry found that brokers could have multiple logins to a single dissemination server through various IPs, which provided at least 15 brokers preferential access.

A year later, SEBI asked NSE to carry out a forensic audit of its systems and deposit the entire revenue from its co-location facilities into an escrow account.

In 2019, the ministry asked the stock exchange to pay ₹625 crores with 12 per cent interest. Besides, it also prohibited NSE from raising money from the stock market for six months.

Ramakrishna and Narain were asked to disgorge 25 per cent of their salaries. For five years, the former CEOs were also barred from associating with a listed company or a market infrastructure institution. It also imposed a penalty of ₹1 crore on NSE.

The Faceless Yogi

Among the several allegations and findings of SEBI, the one that has garnered prominent attention is Ramakrishna's conversation with a spiritual Yogi during her tenure as the MD and CEO of the stock exchange. She had been guided by the unidentified Yogi sitting in the Himalayas. Yogi also made her appoint Anand Subramanian as group operating officer with a huge CTC that kept increasing at regular intervals. The SEBI had levied a Rs 3 crore fine on her for violating rules in Subramaniam's appointment.

Ramkrishna allegedly shared confidential information of the bourse with the 'faceless' Yogi. The former CEO took major decisions with Yogi consultation, SEBI informed.

The Ernst and Young audit report reportedly alleged Subramanian of duping his identity as the Yogi. However, the claim has not been verified.

The Print has detailed the mail exchanges between Ramkrishna and Yogi.

Ramkrishna Denied Allegation

The former CEO had denied all the accusations, stating that the co-location facility at NSE was extended during Ravi Narain's tenure, and she had very 'little' to do with it, The Economic Times had reported.

Also Read: India Slips To Rank 120 On 17 SDGs Adopted As 2030 Agenda, Lies Behind All South Asian Nations

Contributors Suggest Correction
Writer : Devyani Madaik
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Editor : Shiva Chaudhary
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Creatives : Devyani Madaik

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