“Who will invest in India with scams like this,” frustrated judges said today about the sensational case involving deep corruption at the National Stock Exchange (NSE).
Criticizing the Central Bureau of Investigation (CBI) for not acting quickly enough, the judges pointed out that four years have passed since the agency began investigating wrongdoing involving the exchange’s top officials, including the then CEO, Chitra Ramakrishna. She was arrested on March 6 in Chennai; his then adviser, Anand Subramanian, was arrested on 24 February.
The country’s markets regulator, SEBI, should also be investigated to determine whether it has taken steps to block and then punish corruption, the CBI tribunal said today.
The NSE was the largest stock exchange in the country.
In 2018, a select group of traders allegedly received unfair access to NSE’s servers to speed up algorithmic trading, which allowed them to trade sooner than other traders.
Over the past few weeks, CBI officials have visited market regulator SEBI‘s office in Mumbai to collect documents related to the case.
The so-called “server affair” became a dramatic headline a few weeks ago with the discovery that Chitra Ramkrishna, then in charge of the NSE, shared confidential information with someone she described as a Himalayan yogi. The emails show her asking the same stranger for advice.
This was highlighted in a Feb. 11 SEBI order that highlighted breaches of corporate governance at the exchange.
The SEBI order said the former CEO “arbitrarily” appointed Anand Subramanian as his adviser, adding that he had “no relevant experience”. He was given the role of chief adviser to the MD of NSE with a salary vastly disproportionate to his experience.
Chitra Ramkrishna told SEBI during the investigation that she did not compromise the integrity of the exchange.
Finance Minister Nirmala Sitharaman said the government was examining whether SEBI had taken adequate action in the NSE case.
The regulatory order said Chitra Ramkrishna – who stepped down as CEO in 2016 – was “just a puppet” of someone she described as an anonymous yogi in the Himalayas who “would come forward at will”. SEBI said the former CEO made “an incorrect and misleading statement” about the existence of a yogi. Ernst and Young Audit had said that the yogi was none other than Anand Subramanian.
CBI also told the court that the agency’s investigation revealed that it was Anand Subramanian who created the ‘[email protected]’ email id through which he communicated with Chitra Ramakrishna.
The agency also told the court that Chitra Ramakrishna presented a non-existent person (referring to Yogi) to mislead the investigation.
The NSE, launched in 1994, claims that it is the largest derivatives exchange in the world in terms of the total number of contracts traded. Chitra Ramkrishna joined NSE in the early 1990s.