The former Managing Director and Chief Executive Officer of NSE, Chitra Ramkrishna, was steered by a yogi dwelling in the Himalayan ranges in the appointment of Anand Subramanian as the exchange's group operating officer and adviser to MD, according to a SEBI order.
Further, Ms. Ramkrishna gave "frequent, arbitrary and disproportionate" increase in compensation to Mr. Subramanian when there was no evidence of any performance evaluation being done for him and nor was there any evidence to satisfy the rating of A+ given to him for giving such high increment.
Apart from this, Ms. Ramkrishna had shared certain internal confidential information, including financial and business plans of NSE, dividend scenario, financial results with the yogi and even consulted him over the performance appraisals of the exchange's employees.
This was revealed by SEBI in its final order passed on Friday against Ms. Ramkrishna and others.
Ms. Ramkrishna, who was the MD and CEO of NSE from April 2013 to December 2016, referred the yogi as "Sironmani" and the yogi is a spiritual force who has been guiding her for the past 20 years on personal and professional matters.
The unknown person or yogi according to Ms. Ramkrishna was a "spiritual force that could manifest itself anywhere it wanted and did not have any physical or locational co-ordinates and largely dwelt in the Himalayan range".
In its 190-page order, the SEBI found that the yogi guided her to appoint Mr. Subramanian, who was delegated substantial power of management akin to the powers granted to the MD and CEO.
Mr. Subramanian was offered to join the NSE in the role of chief strategic adviser from April 2013 for an annual compensation of ₹1.68 crore. Prior to this, he had worked in Balmer and Lawrie in a middle level management with zero exposure to capital markets and was drawing less than ₹15 lakh per annum as of March 2013.
His annual compensation increased from ₹1.68 crore to ₹Rs 2.01 crore in April 2014 and again his compensation went up to ₹3.33 crore in April 2015. In addition, he was re-designated as Group Operating Officer (GOO) and Adviser to MD. Further, in April 2016, his compensation zoomed to ₹4.21 crore.
According to the SEBI's order, there was no evidence on the file of his performance evaluation although he was consistently rated as a top performer.
However, the hike in the compensation to Mr. Subramanian was also guided by the yogi.
"There appears to be a glaring conspiracy of a money making scheme that involves Noticee no. 1 (Ramkrishna) and 6 (Subramanian) with the unknown person (yogi) by which Noticee no. 1 would increase the compensation granted to Noticee no. 6 and Noticee no. 6 would then pay the unknown person from such increased compensation," the SEBI noted.
Further, the yogi advised Ms. Ramkrishna to revise the contract with Mr. Subramanian to five days a week only on paper for the sake of emoluments.
Not recorded in minutes
The SEBI noted that in spite of being aware of the irregularities on the appointment of Mr. Subramanian, NSE and other officials, including former MD and CEO Ravi Narain did not record the matter in the minutes of the board meeting in the name of confidentiality and sensitive information.
"From the record of events of the appointment of Noticee no 6 and substantial increase in his emoluments every year and the delegation of powers akin to that of MD and CEO, along with the email exchanges between noticee no 1 with the unknown person where noticee no 6 was also a recipient, it is clear that there has been a conspiracy for the appointment and rise of Noticee no. 6 in NSE," the SEBI said.
In the matter of governance lapses while appointing Mr. Subramanian, the SEBI has levied a fine of ₹3 crore on Ms. Ramkrishna, ₹2 crore each on NSE, Mr. Subramanian and Mr. Narain, and ₹6 lakh on V.R. Narasimhan, who was the chief regulatory officer and compliance officer.
Further, Ms. Ramkrishna and Mr. Subramanian have been restrained from associating with any market infrastructure institution or any intermediary registered with the SEBI for a period of three years, while the same for Mr. Narain is two years.
Also, the SEBI has directed the NSE to forfeit the excess leave encashment of ₹1.54 crore and the deferred bonus of ₹2.83 crore, of Ms. Ramkrishna, which was retained by the exchange and deposit the same to its Investor Protection Fund Trust within six days.
In addition, the SEBI has barred the NSE from launching any new product for a period of six months.
