CBI gets NSE go-ahead to prosecute Chitra Ramkrishna in colocation case

Central agency had been waiting for approval since March 2022

The National Stock Exchange (NSE) has given a go-ahead to the Central Bureau of Investigation (CBI) to initiate prosecution proceedings against the exchange’s officials, including former managing director and chief executive officer Chitra Ramkrishna, in the colocation case, said two people in the know.

The NSE, in its board meeting on February 7, gave approval to the central agency’s request to prosecute officials named in the first information report in 2018, sources said. CBI was waiting for a nod for since March 2022.

On February 9, Ramkrishna secured bail in the money laundering case related to alleged illegal phone-tapping of NSE employees. This case was filed by the Enforcement Directorate.

Earlier, in September last year, the Delhi High Court had granted her bail in the colocation case and her alleged involvement in misconduct related to the compensation of former Group Operating Officer of NSE, Anand Subramanian. The case was registered by the CBI.

The case pertains to NSE’s colocation facility launched in 2009, which allows traders and brokers to establish their IT servers within the premises of the bourse’s data centres in return for a fee. These participants can access the stock prices’ information faster, resulting in speedier trade execution.

It has been alleged that some brokers got preferential access to this high-frequency trading facility. The implementation of the colocation technology was carried out under the supervision of Ramkrishna and Ravi Narain, former CEO.

According to legal experts, the July 2018 amendment to Prevention of Corruption Act, introduced statutory protection to public servants against investigation, inquiry and trial to be conducted without the proper sanction of competent authority.

“The cases of prosecution in relation to key managerial personnel of banks and corporations carrying out functions in the nature of public service require previous approval of their board of directors under Section 17A(c). Such a sanction is also mandatory for a court to take cognisance under the Act. CBI had faced challenges in DHFL dcam and seems to be leaving no stone unturned now, in similar cases.” said Sumit Agrawal, founder, Regstreet Law Advisors and a former Securities and Exchange Board of India (Sebi) officer.