Chitra Ramkrishna, Subramanian ran money making scheme, alleges Sebi

Sebi's Feb 11 order cites frequent hike in Subramanian's compensation without proper appraisal, documentation or file notings, and with no involvement of HR head or NRC

Former NSE MD &CEO Chitra Ramkrishna and Group Operating Officer and her Advisor Anand Subramanian ran a money-making scheme during their stint at the National Stock Exchange (NSE), market regulator Securities and Exchange Board of India (Sebi) has alleged.

The order passed by Sebi dated February 11 highlights frequent increase in Subramanian's compensation package without proper appraisal, documentation or file notings and with no involvement of the Human Resource (HR) head or the Nomination and Remuneration Committee (NRC). Furthermore, the order talks about Subramanian being directed to “withdraw and surrender” to the unknown person a gross amount per month as “gratitude.”

“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, 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. This gives further credence to the allegation that there was an arbitrary and disproportionate increase in compensation granted to Noticee no. 6 by Noticee no. 1,” Anant Barua, whole time member (WTM), Sebi has said in the order.

Prior to joining NSE, Subramanian worked at an arm of Balmer & Lawrie as Vice President at less than Rs 15 lakh per annum. He was roped in by NSE in March 2013 at an annual compensation of Rs 1.68 crore, which included variable pay of Rs 42 lakh. By April 2016, Subramanian compensation had increased to Rs 4.21 crore—an increase of 28 times over its salary at his previous employer.

This despite Subramanian being employed only as a consultant.

In her submission to NSE, Ramkrishna said the compensation paid to Subramanian “was not controlled or driven by her”. The argument was dismissed by Sebi.

“I also see no reason on record as to why Chandrasekhar Mukherjee (HR Head of NSE), would have proposed for disproportionately increasing the compensation paid to Noticee no. 6, as contended by Noticee no. 1, as there appears to be no relationship between Noticee no. 6 with Mr. Chandrasekhar Mukherjee, unlike the relationship shared by Noticee no. 6 with Noticee no. 1,” Barua says.

Sebi underscores that the duration of the consultancy contract given to Subramanian was highest among consultants engaged by the exchange between 2013 and 2016.

The order also says Subramanian earned the top appraisal rating while record of performance evaluation of his was maintained.

The Sebi order goes on to say that Ramkrishna indulged in “financial misdeed” by increasing Subramanian’s compensation in “arbitrary and disproportionate manner”.

The regulator also alleges that Ramkrishna made incorrect and misleading submissions to Sebi on appointment and selection of Subramanian.

Sebi says Ramkrishna “failed to maintain the highest standards of personal integrity, truthfulness, honesty and fortitude in discharging her duties and has engaged in acts discreditable to her responsibilities as MD& CEO of NSE by acting arbitrarily and misusing her delegated powers.”