Irregularities found in appointment of chief strategic advisor at NSE: Govt

The government on Tuesday said irregularities in the appointment of chief strategic advisor in the NSE during the tenure of a former MD&CEO were observed and the appointment was made without following due process.

The Securities and Exchange Board of India (Sebi) has informed that an ex-MD&CEO of NSE, had sought guidance from a 'siddha purusha/yogi', Minister of State for Finance Pankaj Chaudhry said in a written reply to the Rajya Sabha.

During the course of investigation by Sebi, it was found that certain emails on various matters were exchanged by that MD&CEO with the yogi, he said.

"Sebi has informed that irregularities were observed in the appointment of the chief strategic advisor (CSA), during the tenure of that ex-MD&CEO of NSE. This appointment was made without following due process of appointment," Chaudhry added.

Accordingly, Sebi imposed monetary penalty and other restrictions on that ex-MD&CEO and the then CSA for violation of provisions of Sebi Act, 1992 and SCRA, 1956/Securities Contracts (Regulation) Act.

The matter relates to former NSE CEO Chitra Ramkrishna and Group Operating Officer Anand Subramanian, who are currently under the custody of the CBI, as the agency is probing them in the co-location scam.

In the co-location facility offered by NSE, brokers could place their servers within the stock exchange premises giving them faster access to the markets.

It is alleged that some brokers in connivance with insiders abused the algorithm and the co-location facility to make windfall profits.

The CBI probe has shown that Ramkrishna was appointed as Joint MD of NSE in 2009 and remained in the position till March 31, 2013, with the power of DMD. She was elevated as MD and CEO on April 1, 2013, and left the bourse in 2016.

Earlier on February 11, the capital markets regulator levied a fine of Rs 3 crore on Ramkrishna, among others for violating securities contract rules in appointment of Anand Subramanian as group operating officer and advisor to MD.

It also levied fine of Rs 2 crore each on the NSE, former CEO Ravi Narain and Subramanian.

Ramkrishna, who succeeded former CEO Ravi Narain in 2013, had appointed Subramanian as her advisor who was later elevated as group operating officer (GOO) at a fat pay cheque of Rs 4.21 crore annually.