Co-Location Scam: CBI Arrests Former NSE CEO Chitra Ramakrishna

The co-location case pertains to allegations that some brokers got undue preference to NSE servers. The stock prices on the trading screen change every microsecond.

New Delhi: Former National Stock Exchange (NSE) chief Chitra Ramakrishna was arrested by the CBI from Delhi late on Sunday evening in the co-location scam case. His medical checkup was done, after which Ramakrishna was kept in a lockup at the CBI headquarters. The probe agency questioned Ramakrishna for three consecutive days and conducted searches at his residence, officials said, adding that his response was not appropriate.

The CBI had also used the services of a senior psychologist of the Central Forensic Science Laboratory who had also questioned the former NSE chief. Officials said the psychologist had also come to the conclusion that the agency was left with no option but to arrest him.

The co-location case pertains to allegations that some brokers got undue preference to NSE servers. The stock prices on the trading screen change every microsecond.

Ramakrishna’s arrest came a day after a Delhi court rejected his pre-arrest bail plea in the co-location case, pulling up the CBI for its inaction and laxity in the probe against the accused in the last four years.

Special Judge Sanjeev Agarwal also observed that the market regulator SEBI has been “very kind” to the accused as it had rejected Ramakrishna’s anticipatory bail plea, observing that she is facing serious charges and needs to know the truth. His continued custodial interrogation would be required to ascertain.

The CBI had recently questioned Ramakrishna in this case. The Income Tax (IT) department had earlier raided various premises linked to Ramakrishna in Mumbai and Chennai. Ramakrishna has also been on the radar of market regulator Securities and Exchange Board of India (SEBI).

On February 25, the CBI had arrested Anand Subramaniam, a former operating officer of the NSE group, after expanding its probe into the co-location scam in the exchange following “fresh facts” in a SEBI report that sought to guide Ramakrishna’s actions. Was referred to a mystical yogi. The Securities and Exchange Board of India on February 11 had accused Ramakrishna and others of alleged governance lapses in the appointment of Subramaniam as chief strategic advisor and his re-designation as group operating officer and advisor to the MD.

Subramaniam was reportedly referred to as a “yogi” in the forensic audit, but Sebi in its final report had refuted this claim. Ramakrishna, who replaced former CEO Ravi Narayan in 2013, had appointed Subramaniam as his advisor, who was later promoted as Group Operations Officer (GOO) on a hefty pay check of Rs 4.21 crore annually.

Subramaniam’s controversial appointment and subsequent promotion, apart from important decisions, was directed by an unidentified person whom Ramakrishna claimed was a formless mystical yogi living in the Himalayas, Ramakrishna during an audit ordered by SEBI. The investigation of email exchanges of SEBI has imposed a penalty of Rs 3 crore on Ramakrishna, Rs 2 crore each on NSE, Rs 2 crore on former NSE MD and CEO Ravi Narayan and Rs 6 lakh on Chief Regulatory Officer and Compliance Officer V R Narasimhan. Ramakrishna left NSE in 2016.

(with agency input)

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