NSE orders not weak or diluted, says outgoing Sebi chief Ajay Tyagi

Recently, FM told a leading financial daily that govt was looking for an answer as to whether Sebi had taken adequate steps in the NSE colocation matter

The orders passed against the National Stock Exchange (NSE) and individuals linked to the colocation scandal weren’t diluted or weak and the regulator worked in the right earnest, said outgoing Sebi chairman Ajay Tyagi on Wednesday.

“Ever since I took over (in 2017), we started the investigation. The colocation matter was complex. There was a lot of technology involved. We issued a series of orders within our remit and understanding. There is no question that the orders were weak or diluted. We have levied one of the highest penalties,” he said.

Recently, the Finance Minister told a leading financial daily that the government was looking for an answer as to whether Sebi had taken adequate steps in the NSE matter.

In April 2019, Sebi had issued a series in the NSE colocation controversy, which included a Rs 1,000-crore penalty on the NSE. Broking outfits OPG Securities and Way2Wealth Brokers were asked to pay over Rs 15 crore each plus interest. NSE's former MD & CEOs Ravi Narain and Chitra Ramkrishna were asked to digorge 25 per cent of their salary for a said period in addition to a five year market ban.

Last month, Sebi issued another order against Ramkrishna for governance lapses and irregularities in the appointment of former group operating officer Anand Subramanian. The order created quite a storm as it revealed Ramkrishna was sharing confidential information with a purported spiritual guru (yogi).

Tyagi said the yogi issue came to Sebi’s notice when investigating the main colo case. “We focused on the main case first. Whatever has come out in the public domain is based on Sebi’s investigation.”

He further said that the market regulator has extended all the help and information to other agencies probing the matter and they are free to pass their own orders based on their findings.

The 1984-batch IAS officer said Sebi’s handling of the market crisis in March 2020 –triggered by the Covid-19 pandemic –and also the mutual fund debt crisis– triggered by Franklin Templeton’s decision to wind up its six schemes–were the most satisfying achievements.

When asked areas which Sebi requires to improve, he said the enforcement function–which involves investigation and adjudication. On the market development side, Tyagi said the bond markets need further development.

He said the government is a key stakeholder and it is necessary to incorporate their views in key decision making. He, however, expressed disappointment over noncompliance of listing regulations by listed PSUs.

Madhabi Puri Buch, who assumed charge as Sebi chairperson, thanked Tyagi for preparing a strong foundation for her to build on.