Former NSE CEO Ramkrishna sent to 7-day CBI custody in co-location case

A Delhi court on Monday sent Chitra Ramkrishna, former managing director (MD) and chief executive officer (CEO) of National Stock Exchange (NSE), to seven days of Central Bureau of Investigation (CBI) custody.

The CBI, on Sunday night, arrested Ramkrishna in the co-location case and produced her before a court on Monday.

The CBI also secured an extension of the custody of former group operating officer of NSE Anand Subramanian till March 9. His 10-day custody ended on Sunday. “Ramkrishna and Subramanian will be jointly interrogated to dig out further details in the co-location case,” an official source said.

The arrests were made in the co-location scam, the FIR for which was registered in May 2018. This was amid fresh revelations about irregularities in the country’s largest stock exchange.  The CBI had earlier questioned Ramkrishna, Subr­a­manian and Ravi Narain, also a former CEO of the NSE.

A report of the Securities and Exchange Board of India (Sebi) last month showed that Ramkrishna took key decisions at the NSE from 2013 to 2016 on the advice of a “Himalayan yogi”, whom she had never met. He instructed her to appoint Subramanian as group operating officer.

The four-year-old FIR of the CBI was primarily against Sanjay Gupta, MD of OPG Securities.  It also named his brother-in-law Aman Kokrady and Ajay Shah, a data specialist and researcher employed by the NSE. It named unknown officials of the NSE and Sebi for their role in the controversy.

Between June 2010 and March 2014, the NSE had deployed the so-called tick-by-tick (TBT) architecture at its colo facility.  TBT disseminated data feed sequentially, giving preference to trading members (TM) that had connected first to the colo server.

Taking advantage of the system, OPG Securities frequ­ently obtained first access to the exchange system in connivance with some NSE staffers.

The issue was brought to light by whistleblower Ken Fong, who sent three complaint letters to Sebi in January, August, and October 2015. Following this, the regulator initiated multiple investigations and forensic audits into the matter.

In April 2019, Sebi directed the exchange to disgorge Rs 625 crore, along with an interest of 12 per cent per annum since 2014, for lapses at its colo facility, which allowed unfair access to certain brokers.

Sebi also told Narain and Ramkrishna, who were at the helm when the exchange servers were exploited, to disgorge a fourth of their salary for a specific period.

The market regulator directed OPG Securities, Gupta and three others to disgorge Rs 15.6 crore, with an interest of 12 per cent per annum since April 2014.

All of them have moved the Securities Appellate Tribunal (SAT) against the order, where the matter is currently being heard.