The Central Bureau of Investigation has filed a chargesheet against the former National Stock Exchange (NSE) managing director Chitra Ramkrishna and its former group operating officer Anand Subramanian in the alleged co-location scam case.
After several rounds of questioning, the agency had arrested Mr. Subramanian in February and days later, Ms. Ramkrishna was also arrested. The move came after, on February 11, the Securities and Exchange Board of India (SEBI) levied fines on the two accused and others on various counts, and then the Income Tax Department searched their premises in Chennai and Mumbai.
Both the accused are currently in judicial custody. Their bail pleas are scheduled to be heard by a special court later this month.
The CBI had registered the case in May 2018. It was alleged that Delhi-based broker firm OPG Securities, owned by Sanjay Gupta, and some others used an algorithmic trading software to gain preferential access to the NSE server data during 2010-14, in conspiracy with some data centre staff members. Owing to the then available co-location facility, the accused also got quicker data access via the exchange’s secondary server.
The software was developed by accused Ajay Narottam Shah purportedly using the exchange’s trade data collected in 2005-06 for the purpose of research work. As alleged, the data was shared with Infotech Financial Services Private Limited and Mr. Shah despite the fact that the company supplied algorithmic software to various brokers in the NSE and, therefore, there was a conflict of interest.
Abuse of position
In the same case, the role of unknown officials of the SEBI and the NSE was also under the scanner for suspected abuse of official position.
This apart, the CBI is currently probing the email exchanges between Ms. Ramkrishna and a “Himalayan yogi”, on whose instructions she allegedly took several key decisions. They included the appointment of Mr. Subramanian as the chief strategic adviser, his re-designation as group operating officer and huge salary increments for him in quick successions, as alleged.
The agency has accused Mr. Subramanian of creating the email ID “rigyajursama@outlook.com” through which the unknown “yogi” was in constant touch with Ms. Ramkrishna and would receive the NSE’s confidential documents from her. The CBI has retrieved about 2,500 email exchanges that are being analysed. It has also contacted Microsoft for technical assistance.
Ms. Ramkrishna was the exchange’s managing director and chief executive officer from April 1, 2013, to December 2, 2016. The alleged co-location scam was reported to the SEBI by a “whistleblower” in January 2015, which triggered a sequence of events leading up to the resignation of Mr. Subramanian in October 2016 and then the stepping down of Ms. Ramkrishna.
