Delhi court rejects former NSE chief’s pre-arrest bail petition

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Acts of “financial skullduggery” can shatter the faith of investors in the stock market, a Delhi court said on Saturday, while denying anticipatory bail to Chitra Ramkrishna, former chief executive and managing director of the National Stock Exchange (NSE), who is facing charges of misgovernance at the country’s top bourse by trading volumes.

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“The magnitude of the present case may be huge, as due to this financial skulduggery huge loss may have been caused to adherent stockbrokers, institutional investors, foreign institutional investors and honest investors, whose faith in this premier financial institution, i.e. NSE, may have been severely shaken and dented,” the court said.

Ramkrishna is charged with leaking sensitive information to the co-accused and others, claiming that she was acting on the advice of a so-called Himalayan yogi, who investigators maintain was none other than former group operating officer Anand Subramanian.

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On February 25, the Central Bureau of Investigation (CBI) arrested Subramanian after expanding its probe into a co-location scam in the exchange, following “fresh facts” in a report by the markets regulator that referred to a mysterious yogi guiding the actions of Ramkrishna. Some brokerages had been allegedly given preferential and unfair access to NSE’s trading system to the detriment of others.

Additional sessions judge Sanjeev Aggarwal pulled up the CBI for its “lackadaisical” probe, saying that the agency had not taken action against the main beneficiaries of the co-location scam, “who seem to be enjoying merrily at the expense of common citizenry”.

“The conduct of the investigating agency, i.e. CBI, is most lackadaisical, to say the least, as no action seems to have been taken against main beneficiaries of the present co-location scam and others for almost four full years,” the judge said.

It also said that markets watchdog Securities and Exchange Board of India has been too kind and gentle with respect to the accused persons.

Denying relief to Ramkrishna, the court said the accused had introduced a non-existing person to mislead the investigating agency, which may also show her connivance in the matter.

“The very appointment of Anand Subramanian without following due process at very exorbitant salary prima facie shows that all of them may have been acting in tandem with each other in carrying out or in furtherance of the objectives of the co-location scam,” the court said. “Prima facie, this kind of co-location swindle could not have been possible without the knowledge and active connivance of all the functional heads of the NSE at the relevant time. This period can be considered as dark period in the history of NSE,” the court said.

Noting that the investigations are at a nascent stage, the court said: “There are many facets of investigations, which have to be excavated by the investigating agency after removing the dust of time over them.”

Ramkrishna, who succeeded Ravi Narain as chief executive in 2013, had appointed Subramanian as her advisor, who was later elevated as the group operating officer at a fat pay cheque of 4.21 crore a year.

Subramanian’s controversial appointment and later elevation, besides crucial decisions, were guided by an unidentified person, who Ramkrishna claimed was a Himalayan yogi, a probe into her email exchanges during a forensic audit ordered by SEBI revealed.

Ramkrishna had left the NSE in December 2016. On February 11, SEBI charged Ramkrishna and others with alleged misgovernance in the appointment of Subramanian as a chief strategic advisor and his redesignation as group operating officer and advisor to the managing director.

The capital markets regulator has imposed a fine of 3 crore on Ramkrishna, 2 crore each on NSE, Subramanian and Narain, and 6 lakh on V R Narasimhan, who was chief regulatory and compliance officer.

The CBI, which has been probing the co-location scam since 2018 against a Delhi-based stockbroker, swung into action after the SEBI report that showed alleged abuse of power by the then top brass of the NSE.

The agency expanded its probe and grilled Ramkrishna, Narain and Subramanian in connection with the scam.

The central probe agency booked stockbroker Sanjay Gupta, owner and promoter of Delhi-based OPG Securities, in 2018 for allegedly making gains by getting early access to NSE’s trading system.


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