CBI arrests former NSE MD Chitra Ramakrishna

The investigation into the co-location scam will look into preferential data access from the exchange’s server architecture.

The former Managing Director of the National Stock Exchange (NSE), Chitra Ramkrishna, was arrested on Sunday by the Central Bureau of Investigation (CBI) in a case filed in May 2018 to investigate the alleged abuse of the exchange’s server architecture to give a stock broker preferential access to market data over others.

The news came just days after the agency arrested former NSE Group Operating Officer Anand Subramanian in the same case. From April 2013 to December 2016, Ms. Ramkrishna, who has been with the exchange since the early 1990s, served as its Managing Director and Chief Executive Officer. There will almost certainly be more arrests in this case in the near future.

Ms. Ramkrishna, Mr. Subramanian, and former NSE MD Ravi Narain were fined by the Securities and Exchange Board of India (SEBI) on February 11 for multiple violations, including irregularities in Mr. Subramanian’s appointment as a Chief Strategic Advisor and his re-designation as the Group Operating Officer and Advisor to the then NSE MD.

CBI arrests
CBI arrests

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Following that, the Income-Tax Department searched Ms. Ramkrishna’s and Mr. Subramanian’s homes in Mumbai and Chennai, while the CBI issued “look out” circulars against the two and Mr. Narain, after which the agency recorded their statements.

Mr. Subramanian was arrested by the CBI for refusing to cooperate in the investigation and refusing to reveal the true identity of the “Himalayan yogi” with whom he and Ms. Ramkrishna had shared internal confidential documents of the exchange during the check period, according to the allegations. He remained in the custody of the agency until Sunday. He allegedly created the email account [email protected], which was purportedly used by the unknown person to communicate with the two, according to the agency.

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Mr. Subramanian was a major beneficiary of the said yogi’s purported recommendations to Ms. Ramkrishna, according to the SEBI order. He knew her prior to his appointment at the NSE. His wife worked for the NSE in Chennai as the regional head. He was offered 1.6 crore for the position of Chief Strategic Advisor in January 2013, when his last drawn salary was 15 lakh. He received raises in quick succession, and by 2016, his remuneration had risen to around 5 crore.

The CBI has filed a case against Delhi-based OPG Securities and others, including unidentified SEBI and NSE officials. The company’s top executives are accused of exploiting loopholes in the exchange’s server infrastructure and conspiring with the NSE data center’s staff to gain preferential access to the market feed.

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