Ex-NSE chief Chitra Ramakrishna arrested in Stock market manipulation case
The Central Bureau of Investigation (CBI) on late Sunday night arrested former National Stock Exchange CEO Chitra Ramkrishna in the co-location scam case. Ramkrishna’s arrest comes a day after her anticipatory bail application was rejected by a special court in Delhi.
The CBI had grilled Ramkrishna for three days in February and carried out searches at her residence on 24th and 25th of that month, officials said, adding that she was not giving proper responses.
The central probe agency had also used services of a senior psychologist of the Central Forensic Science Laboratory who also questioned her, they said.
The officials said the psychologist had also come to the conclusion that she was evasive in responses leaving no option for the agency but to arrest her.
A special CBI court had on Saturday rejected her anticipatory bail application, they said.
The CBI, which was probing the co-location scam since 2018 against a Delhi-based stock broker, swung into action after a Sebi report showed alleged abuse of power by the then top brass of the NSE, the officials said.
The officials said investigation is going on in the alleged role of the then senior NSE officials who were looking into the co-location facility which is understood to have given “unfair advantage and wrongful gain” to certain stock brokers including OPG securities, an accused in the case, at the cost of others.
The officials said co-location facility in NSE was a “major policy decision” in which the then MD and CEO and other senior officials would have played “decisive role”.
The CBI probe has shown that Ramkrishna was appointed as as Joint MD in 2009 and remained in the position till March 31, 2013, with the power of DMD. Ramkrishna got elevated as MD and CEO on April 1, 2013.
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It was during this period that co-location facility was started by NSE, the CBI has alleged.
In the co-location facility offered by NSE, brokers could place their servers within the stock exchange premises giving them faster access to the markets. It is alleged that some brokers in connivance with insiders abused the algorithm and the co-location facility to make windfall profits.
The CBI has also found that Muralidharan Natarajan, the CTO of NSETECH (a subsidiary of NSE), who was responsible for setting up co-location architecture at the NSE, was directly reporting to Ramkrishna, officials said.
On February 25, the CBI had arrested former NSE group operating officer Anand Subramanian after expanding its probe into the co-location scam in the exchange following “fresh facts” in the Sebi report that referred to a mysterious yogi guiding the actions of Ramkrishna.
The Securities and Exchange Board of India (Sebi) on February 11 had charged Ramkrishna and others with alleged governance lapses in the appointment of Subramanian as the chief strategic advisor and his re-designation as group operating officer and advisor to MD.
Subramanian was allegedly referred to as the “yogi” in the forensic audit but Sebi in its final report had rejected the claim.
Ramkrishna, who succeeded former CEO Ravi Narain in 2013, had appointed Subramanian as her advisor who was later elevated as group operating officer (GOO) at a fat pay cheque of Rs 4.21 crore annually.
Subramanian’s controversial appointment and subsequent elevation, besides crucial decisions, were guided by an unidentified person who Ramkrishna claimed was a formless mysterious yogi dwelling in the Himalayas, a probe into her email exchanges during the Sebi-ordered audit showed.
Sebi has levied a fine of Rs 3 crore on Ramkrishna, Rs 2 crore each on NSE, Subramanian, former NSE MD and CEO Ravi Narain, and Rs 6 lakh on V R Narasimhan, who was the chief regulatory officer and compliance officer.
Ramkrishna had left NSE in 2016.
(with PTI inputs)