NSE Scam: CBI on Sunday arrested Chitra Ramkrishna, former CEO and MD of National Stock Exchange (NSE), in a case of bourse manipulation. This is the second high-profile arrest in the case, with the agency last month arresting Anand Subramanian, NSE’s former group operating officer and Ramkrishna’s deputy and confidante.
“Ramkrishna has been arrested following questioning and will be produced in a competent court on Monday,” a CBI official said. Ramkrishna had earlier been questioned by the agency last month along with Subramanian and former NSE CEO Ravi Narain.
The CBI action comes in the wake of allegations against Ramkrishna that she was sharing confidential information of the bourse with a “Himalayan Yogi” and had got Subramanian appointed in violation of rules.
A special CBI court had on Saturday rejected her anticipatory bail application, they said. The CBI, which was probing the NSE 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.
A Timeline on How the NSE Co-Location Scam was Unearthed, Involvement of Chitra Ramkrishna and the ?Himalayan Yogi?
—A whistleblower in 2014-15 complained to the Sebi saying some brokers in collusion with a few top NSE officials had abused the co-location facility. It is alleged that OPG Securities was provided unfair access between 2012 and 2014 that enabled it to log in first to the secondary server and get the data before others in the co-location facility.
—On December 2, 2016, Chitra Ramkrishna, a founder-member of NSE, resigns as MD after spending 23 years with the stock exchange.
—Following three letters from the whistleblower, SEBI formed an expert committee under the guidance of its Technical Advisory Committee.
—The expert committee found that the architecture of NSE with respect to dissemination of tick-by-tick (TBT) data through Transmission Control Protocol/Internet Protocol (TCP/IP) was prone to manipulation and market abuse. It also found that preferential access was given to stockbrokers
—When first exposed, the NSE management adopted a high-handed attitude, slapping a Rs 100 crore defamation suit against the media outlet to do so.
—Matter was moved to Bombay High Court. It came done heavily on NSE and dismissed its suit. Further, NSE was told to pay Rs 50 lakh as penalty.
—In 2016, SEBI asked NSE to carry out a forensic audit of its systems and deposit the entire revenue from its co-location facilities in to an escrow account.
—Deloitte was tasked with the job of conducting a forensic audit of NSE’s systems.
—On June 21, 2017, Unsatisfied with Deloitte Touche Tohmatsu repost, Sebi says it will recruit its own forensic auditor to investigate the scam.
—On June 21, 2018, Sebi says it has initiated enforcement actions against entities involved in the case.
—In 2019, SEBI passed its order on the issue, asking NSE to pay Rs 625 crore with an interest of 12 per cent and also barred NSE from raising money from stock market for six months.
—Also, Sebi directed OPG Securities and its directors to disgorge unfair gains of Rs 15.7 core with an interest of 12 per cent from April 7, 2014.
—Ravi Narain and Chitra Ramakrishna, who were at the helm of the affairs during the issue were asked to disgorge 25 per cent of their salary drawn during a specified period and penal orders were also passed against others seen to be gaming the system.
—On July 4, 2019, Sebi serves show-cause notices to several entities in the scam, former NSE MDs Ravi Narain and Ramkrishna, the exchange itself and several of its top officials (former and serving).
—In February 2022, the regulator once again fined Ramakrishna and Narain for corporate governance lapses in the appointment of NSE’s group operating officer, Anand Subramanian. Subramanian was arrested by CBI last month.
—According to the CBI, between 2010 and 2014, Gupta allegedly “abused” the NSE server architecture in a criminal conspiracy with “unknown officials” from the Exchange.
—Last month, a CBI team visited the SEBI office in Mumbai and collected documents related to the case in which it has already booked Sanjay Gupta, the owner and promoter of Delhi-based OPG Securities Pvt Ltd, and others.
f—On February 18, 2022, CBI issued a lookout circular against Chitra Ramkrishna, former CEO Ravi Narain and former COO Anand Subramanian. Last month, the CBI had arrested Anand Subramanian from Chennai in view of fresh facts emerging in the NSE co-location case.
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