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Explained: From Co-Location Scam To Yogi, All You Need To Know About Chitra Ramakrishna Case

Ramakrishna is also under fire for irregularities in appointing Subramaniam as the chief strategic advisor at NSE.

NSE is the leading stock exchange of India.
NSE is the leading stock exchange of India.

The Income Tax Department on February 17, 2022, raided premises linked to Chitra Ramakrishna, the former NSE MD and CEO  in Mumbai as part of a tax evasion investigation against her and others, official sources said.

Officials said the searches are aimed to check charges of tax evasion and financial irregularities against her and others.

The National Stock Exchange (NSE), India’s leading stock exchange, is not new to controversy. This time, however, the controversy has brought NSE directly under the radar of the Securities and Exchange Board of India (SEBI). The four actors in this almost-fictional case are Chitra Ramakrishna and Ravi Narain, the former MDs and CEOs of NSE, Anand Subramaniam, the exchange's group operating officer and advisor to MD and the NSE Board itself, whereas a mysterious ‘Yogi’ with whom Ramakrishna shared confidential information and intricate details regarding the functioning and Hierarchy at NSE is the villain in this case. Ramakrishna is also under fire for irregularities in appointing Subramaniam as the chief strategic advisor at NSE. Notably, Ramakrishna, who was appointed NSE's MD and CEO in 2013 resigned from NSE in 2016, whereas Narain resigned a year later in 2017. 

Introducing NSE’s Co-Location Facility

NSE introduced the co-location facility in 2009, wherein the stock exchange allowed traders to place their servers in NSE’s data centre. It benefits the trader by having faster access to the price feed, which is distributed by the stock exchange. Notably, several stock exchanges globally allow the installation of a co-location facility in high-frequency trading. 

NSE started offering tick-by-tick data, three months after the introduction of the co-location facility. According to NSE’s website, tick-by-tick data disseminates information about orders and trades on a real-time basis. The data feed is in Transmission Control Protocol/Internet Protocol (TCP-IP) format. 

The Co-location Scam and Ramakrishna

The entire NSE discrepancy came to light in 2015, after a whistleblower filed three written complaints with SEBI alleging that some traders got preferential access to NSE’s co-location facilities. The whistleblower also explained the flaws in the co-location systems and had alleged that some NSE employees were colluding with these traders. 

The SEBI investigation revealed that some traders got preferential access in the co-location facility like early logins, and split-second access to the data feed in the exchange, resulting in huge gains by the trader. It also revealed that some traders had multiple IP addresses in dissemination servers and secondary servers for accessing the data, resulting in market manipulation. One such broker, who allegedly gained through the system was OPG securities. According to SEBI, the NSE Board including Ramakrishna and Narain, neither employed any policy to map the IP addresses of these traders nor any standard operating procedures on accessibility to the IP addresses. 

Following its three-year-long investigation, SEBI on February 10, 2021, slapped a fine of Rs 25 lakh on Ramakrishna and Narain, and also imposed a fine of Rs 1 crore on NSE. 

The Yogi Connection

Ramakrishna in her statements before SEBI dated April 14, 2018, said that she met Siddha Purusha/‘Yogi’/Paramhansa, 20 years ago on the banks of Ganges, and has been taking his guidance on personal and professional matters, since then. She also disclosed that she corresponded with Yogi via email, with his email id as 'rigyajursama@outlook.com.’ Notably, in most of the conversations between Ramakrishna and Yogi, Subramaniam was also marked in the email. 

Regarding whether discussion with an outsider as the chief of NSE Ramakrishna said, “As an MD  and CEO, before I am able to come to a perspective of my view only, the guidance is sought. It is only to enable me in my role to have a primary view.”

“As we know, senior leaders often seek informal counsel from coaches, mentors or other seniors in this industry which are all  purely informal  in  nature. In  a  similar strain I  felt that  this  guidance would help me perform my role better. Being spiritual in nature there would never be a question of  any confidentiality  or  integrity issues  being  compromised for the organization,” she added.     

Meanwhile, according to media reports, an audit by Ernst and Young LLP (EY)--which was asked by SEBI and commissioned by NSE-- has claimed that it is none other than Anand Subramaniam. 

Subramaniam’s Entry


In her statements, Ramakrishna said that apart from financial decisions, she also sought guidance regarding the appointments and promotions of some of the officials of NSE from the 'Yogi.' According to SEBI, Subramaniam was appointed as a chief strategic advisor in the NSE by Ramakrishna with several procedural lapses wherein she neither consulted the HR department regarding Subramaniam’s appointment nor conducted a discussion with NSE Board. Subramaniam’s appointment in NSE was solely Ramakrishna’s decision. His primary role in NSE was that of a consultant working four days a week. Subramaniam, who had previously worked at Balmer and Lawrie drawing a salary of Rs 15 lakh, had no prior knowledge of capital markets. However, in 2013, when he was hired by NSE, he was offered a salary of Rs 1.68 crore. Over the years, he went on to become powerful in the exchange, with his salary shooting up to Rs 4 crore in 2016. 

What actions are taken against NSE, Ramakrishna, and Subramaniam so far?

SEBI has imposed a penalty of Rs 3 crore on Ramakrishnan. Narain, Subramaniam and Ramakrishna have been barred from participating in the markets for the next three years. NSE, Narain and Subramaniam have been imposed a penalty of Rs 2 crore each. NSE is barred from launching any new product for the next six months.

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