Ex-GOO of NSE Anand Subramanian arrested

The Central Bureau of Investigation (CBI) late on Thursday arrested former Group Operating Officer (GOO) of the National Stock Exchange (NSE), Anand Subramanian, in its 2018 probe into a co-location fraud, and in connection with mails cited by the Securities and Exchange Board of India (Sebi) in its recent report on the issue that showed then CEO Chitra Ramkrishna corresponding with a “Himalayan yogi” over the management of the exchange.

The twist in the tale, said people familiar with the matter, was that evidence at his residence suggested that Subramanian may be the yogi himself. This appears to tie in with what NSE itself claimed to the stock market regulator, whose report also highlights that Subramanian’s appointment was irregular, as were the frequent and repeated increases in his salary.

Subramanian’s arrest, the first in the case, came after he was questioned for four days by the agency. A senior officer of the agency who asked not to be named said Subramanian was evasive during his interrogation. He was brought to Delhi on Friday afternoon.

CBI started investigating the case in 2018. The so-called co-location fraud surfaced when a whistle-blower alleged in 2015 that some NSE members were benefiting from advance information (because their servers were located on the exchange’s premises) in collusion with some exchange officials. The fraud is believed to have happened between 2010 and 2014. Sebi also investigated the fraud, which, along with the circumstances surrounding Subramanian’s appointment and remuneration, forced the resignation of Ramkrishna, then CEO. Subramanian, whose wife (also an employee of NSE), is believed to be a close friend of Ramkrishna, was hired in 2013, soon after Ramkrishna took over as CEO.

Since Sebi’s report surfaced, the agency has expanded its probe and grilled Ramkrishna, former CEO Ravi Narain and Subramanian in connection with the scam in the past one week. The federal agency had already booked a Delhi based stock broker for allegedly making gains by getting early access to information.

“It was alleged that the owner and promoter of said private company abused the server architecture of NSE in conspiracy with unknown officials of NSE. It was also alleged that unknown officials of NSE, Mumbai had provided unfair access to said company using the co-location facility during the period 2010-2012 that enabled it to log in first to the exchange server of Stock Exchange that helped to get the data before any other broker in the market,” CBI said in the FIR.

Sebi on February 11 charged Ramkrishna with alleged governance lapses in the appointment of Subramanian as the chief strategic adviser and his redesignation as group operating officer and adviser to MD.

Mint reported on February 18 that Sebi indicted Ramkrishna for corporate governance transgressions guided by a Himalayan yogi. It further reported that NSE’s version was that the so-called yogi was Subramanian.

CBI says it is verifying these facts. A Chennai court has sent Subramanian to CBI custody till March 6.

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