CBI quizzes Chitra Ramkrishna; calls for lookout on her, Narain

The Central Bureau of Investigation (CBI) on Friday questioned Chitra Ramkrishna, former managing director (MD) and chief executive officer (CEO) of the National Stock Exchange, and issued lookout circulars against her and two other ex-NSE officials to prevent them from leaving the country.

“The CBI questioned Chitra Ramakrishna in light of fresh facts that have emerged (in connection with irregularities at the NSE). Lookout circulars have been issued against her, Anand Subramanian (former group operating officer at the NSE), and Ravi Narain (former vice-chairman and MD) so that they don’t leave the country,” a CBI official said. The official added that the agency may also question Subramanian and Narain soon.

The CBI action came a day after the Income Tax Department raided the premises of Ramkrishna and Subramanian to check and gather evidence in connection with the charges of alleged financial irregularities and tax evasion against the two.

The raids come a week after it was revealed through a Sebi report that Ramkrishna took key decisions at the NSE from 2013 to 2016 on the advice of an unknown “Himalayan yogi”, whom she had never met and who instructed her to appoint Subramanian as group operating officer.

The report also highlighted Subramanian’s outsized influence on the functioning of the NSE despite his appointment not being cleared by the human resource department. Ramkrishna was ousted from the NSE in 2016 for her alleged role in algo-trading through the use of colocation servers, and abuse of power in appointing Subramanian.

Another source said the latest investigation is being done on the basis of an FIR filed by the CBI on May 28, 2018, in the colocation (colo) matter. The four-year-old FIR was primarily against Sanjay Gupta, MD of OPG Securities, and it also named his brother-in-law Aman Kokrady and Ajay Shah, a data specialist and researcher employed by the NSE, along with unknown officials of the NSE and Sebi for their role in the controversy.

Between June 2010 and March 2014, the NSE had deployed the so-called tick-by-tick (TBT) architecture at its colo facility. TBT disseminated data feed sequentially, giving preference to trading members (TM) that had connected first to the colo server.

Taking advantage of the system, OPG Securities frequently obtained first access to the exchange system in connivance with certain NSE staffers. The issue was brought to light by a whistleblower, Ken Fong, who sent three complaint letters to Sebi in January, August and October 2015, following which the regulator initiated multiple investigations and forensic audits into the matter.

In April 2019, Sebi directed the exchange to disgorge Rs 625 crore, along with an interest of 12 per cent annum since 2014, for lapses at its colo facility that allowed unfair access to certain brokers. Sebi also asked Narain and Ramkrishna -- who were at the helm when the exchange servers were exploited -- to disgorge a fourth of their salary for a said period and also barred them from associating themselves with a listed company or market intermediary for five years.

The markets regulator directed OPG Securities, Gupta, and three others to disgorge Rs 15.6 crore -- with an interest of 12 per cent per annum since April 2014 -- that they made “unlawfully”. All of them moved the Securities Appellate Tribunal against the order, where the matter is currently being heard.