The Central Bureau of Investigation (CBI) on Monday got seven-day custody of the former National Stock Exchange (NSE) managing director Chitra Ramkrishna in the co-location case.
A day after her anticipatory bail plea was rejected, Ms. Ramkrishna was arrested by the agency on Sunday as she was allegedly not cooperating in the probe. She was produced before a special Delhi court that sent her to CBI custody.
The custody of former NSE group operating officer, Anand Subramanian, was also extended by three days. The CBI plans to confront the two accused persons with each other to determine the magnitude and scope of the alleged criminal conspiracy in the case.
As alleged, Ms. Ramkrishna had coerced the NSE’s Human Resources department to hire Mr. Subramanian as the chief strategic advisor in 2013. During her tenure, stock broker firm OPG Securities is alleged to have gained preferential access to the exchange’s data feed via its secondary server.
From January 2010 to May 2015, the company had logged on to the secondary server for 670 trading days. It made an “unlawful” gain of about ₹15.57 crore, according to the Securities and Exchange Board of India (SEBI).
Chitra Ramkrishna and the story of the ‘faceless yogi’ | In Focus podcast
Ms. Ramkrishna was the NSE managing director and chief executive officer from April 1, 2013, to December 2, 2016.
The SEBI found that in 2012, OPG Securities had been issued regular warnings for logging on to the secondary server in violation of the NSE guidelines. However, no such warning was given during 2013.
The CBI probe has revealed that Muralidharan Natarajan, the Chief Technology Officer of NSETECH, a subsidiary of the NSE, had overseen the setting up of the co-location architecture in the exchange.
The agency alleges that OPG Securities used an algorithmic trading software package named “Chanakya” to get market feeds from the NSE server ahead of others. The software was developed by another accused, Ajay Narottam Shah, using the NSE trade data he gathered in 2005-06 on the pretext of research work.
It is alleged that the data was shared with Infotech Financial Services Private Limited and Mr. Shah, despite the fact that the company supplied algorithmic software to brokers in the NSE, and so there was a conflict of interest.
The agency is also trying to establish the identity of an unknown ‘Himalayan yogi’ with whom Ms. Ramkrishna had allegedly shared the exchange’s internal confidential documents via email. She also received instructions from the unknown person.
Mr. Subramanian was an alleged beneficiary of the recommendations of the ‘yogi’. In January 2013, he was offered ₹1.68 crore for the post of chief strategic advisor, while his last drawn salary was ₹15 lakh. His compensation increased to about ₹5 crore by 2016.
The CBI has accused Mr. Subramanian of creating the email ID through which the unknown person used to communicate with Ms. Ramkrishna. The agency has retrieved about 2,500 email exchanges that are being analysed.
