The CBI arrested former National Stock Exchange CEO Chitra Ramkrishna in the co-location scam case on Sunday, March 6, officials said. Ramkrishna was arrested in Delhi and taken for medical checkup, and was later lodged in lockup at the CBI headquarters. 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 the 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, March 5, 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 Delhi court, which dismissed her anticipatory bail plea termed the scam as a "dark period" in the bourse's history. The Rouse Avenue Court's order, accessed by IANS, shows that the court was not happy with the conduct of Ramkrishna as NSE chief. "Being in pole position in the NSE earlier, there are strong chances that she may influence and tamper with the evidence, as she was Joint MD as well as MD & CEO of the NSE, the role of which is under investigation under the present co-location scam," the court had said.
It noted that Ramakrishna had introduced a non-existing person to mislead the investigating agency which may also prima facie shows 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.
It said that co-location swindle could not have been possible without the knowledge and active connivance of all the functional heads of the NSE, such as Ramkrishna. "This period can be considered as dark period in the history of the NSE," the court added.
The CBI said that certain documentary evidences were recovered into the allegations related to the co-location facilities at the NSE, which demonstrated that Ramkrishna had shared confidential information of NSE regarding organisational structure, dividend scenario, financial results, human resources policy and related issues, response to the regulator, future projects with the "Himalaya-based yogi" by addressing her correspondence from email IDs rchitra@icloud.com and chitrar@nse.co.in to unknown email 'rigyajursama@outlook.com' during the period 2013 to 2016.
The CBI investigation is on 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. Officials told PTI that the 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".
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. It was during this period that co-location facility was started by NSE, the CBI 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.
Meanwhile, a Delhi court Monday sent former managing director and chief executive officer of National Stock Exchange Chitra Ramkrishna to 7-day CBI custody in the NSE co-location scam case, saying her custodial interrogation was required for fair and proper investigations.
Special Judge Sanjeev Aggarwal passed the order after hearing arguments from CBI and the counsel appearing for accused.