Delhi court raps CBI and Sebi, denies pre-arrest bail to ex-NSE boss Chitra Ramkrishna


A Delhi court on Saturday rejected the anticipatory bail application of former National Stock Exchange (NSE) chief Chitra Ramkrishna in connection with a CBI inquiry into a 2018 case of manipulation of the bourse.

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Special Judge Sanjeev Aggarwal termed the CBI investigation “lackadaisical”, saying the agency had not taken action against the main beneficiaries of the co-location scam, “who seem to be enjoying merrily at the expense of common citizenry for the reasons best known”.

The court said the investigation was at its most nascent stage and had to follow a path towards a journey which had just begun. “At the same time, the conduct of the investigating agency i.e. the CBI is the most lackadaisical, to say the least, as no action seems to have been taken against main beneficiaries of the present co-location scam and others, for almost four full years, who seem to be enjoying merrily at the expense of common citizenry for the reasons best known,” it said.

“Even Sebi, despite being the capital markets watchdog, has been too kind and gentle qua the accused persons in the present FIR /RC,” the court said.

The court said “there are many facets of the investigations which have to be excavated by the investigating agency after removing the dust of time over them”.

“The magnitude of the present case may be huge, as due to this financial skulduggery, huge loss may have been caused to adherent stockbrokers, institutional investors, foreign institutional investors and honest investors, whose faith in this premier financial institution i.e. NSE may have been severely shaken and dented,” the order read.

Ramkrishna had moved the court after the arrest of her former colleague Anand Subramanian, who was the NSE’s group operating officer. He will be in CBI custody till Sunday.

The court said that though Ramkrishna’s chances fleeing from justice were remote, there were “strong chances that she may influence and tamper with the evidence, as she was joint managing director as well as managing director & chief executive officer of the National Stock Exchange”.

Ramkrishna’s lawyers, senior advocates Dayan Krishnan and Trideep Pais, argued that she was “never named in the FIR or called for questioning even once in these four years”. They argued that the “alleged offence was committed 8-10 years ago and therefore, there was no justification for placing her under custody now”.

They told the court Sebi’s 30 April, 2019, order that levelled certain allegations of irregularities against her, had been stayed by the Securities Appellate Tribunal. Her lawyers also argued that the 11 February, 2022, report of Sebi contained her private conversations, and they had no bearing on her functioning as the NSE head. Appropriate legal recourse will be taken against the order, they added.

The CBI opposed the anticipatory bail petition stating that she had not given proper responses to its queries in the three days of questioning. The agency told the court a senior forensic psychologist had stated that Ramkrishna was evasive and “always attributed knowledge regarding the matters to her [subordinate] functionaries”.

The court was told the agency was investigating how Subramanian was appointed as a consultant with the NSE by Ramkrishna and “paid a very high salary despite not having proper qualifications”.

The CBI claimed to have recovered evidence that Ramakrishna had shared certain confidential information of the NSE such as its organizational structure, dividend scenario, financial results, human resources policy and related Issues “with an unknown person during the period from 2013 to 2016″.

“The NSE, headed by Ramkrishna, gave the trading date to M/s. Ionfotech Financial Services Pvt. Ltd, which was misused for developing an algorithm for trading products for the securities market participants. This was sold to various trading members, thereby giving them an advantage (over others),” it further submitted.

The CBI case was filed after a Sebi report that said Ramkrishna had been sharing confidential information with a “Himalayan Yogi” and indicted her for Subramanian’s appointment “in contravention of rules”.

A Sebi order penalised Ramakrishna for allegedly violating securities contract rules in the appointment of Subramanian as group operating officer and advisor to the managing director. The markets watchdog said she had been steered by the “Himalayan yogi” in the appointment.

The 2018 case pertains to charges of giving some brokers preferential access to the trading system through the co-location facility (where brokers can buy “rack space” for their servers) at the NSE, early login and “dark fibre”, which can allow a trader split-second faster access to the data feed of the exchange. Even a split-second edge is considered capable of bringing huge gains to a trader.

Ramkrishna was managing director and chief executive of the NSE from April 2013 to December 2016.


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