FinMin Probing SEBI, NSE Lapses in Chitra Ramkrishna & Himalayan Yogi Case: Reports
Moneylife Digital Team 17 February 2022
Taking note of the outrage on the weak order passed by the Securities and Exchange Board of India (SEBI) and lapses in National Stock Exchange (NSE), which allowed its former managing director (MD) and chief executive officer (CEO) Chitra Ramkrishna to be let off easily, the ministry of finance (MoF) has started investigation in the case. According to media reports, officials from MoF also met Vikram Limaye, MD and CEO of NSE, to discuss various lapses at the Exchange. But more about it later.
According to a report from the  Times of India (ToI), “the Union government and SEBI are examining how the former MD & CEO of NSE was let off without any action or penalties and the curious decision of the country’s largest bourse to allow her laptop to be destroyed as e-waste when it contained crucial evidence, including the IP address of the mysterious guru advising the disgraced executive.”
“Besides, some of the appointments on the board and the links of key NSE functionaries with some prominent government functionaries during the United Progressive Alliance (UPA) regime, are under the lens,” the report says.
In an order issued last week, SEBI barred Chitra Ramkrishna, Ravi Narain, former vice-chairman and Anand Subramanian, former group operating officer (GOO) and advisor to MD and CEO, from associating with any market infrastructure institution (MII) or any intermediary registered with SEBI. While imposing a monetary penalty of Rs3 crore on Ms Ramkrishna, the market regulator has asked NSE to forfeit her excess leave encashment of Rs1.54 crore and the deferred bonus of Rs2.83 crore. The market regulator also restricted NSE from launching any new product for six months. (Read: Latest SEBI Order against NSE’s Former Management including Chitra Ramkrishna Reveals Shocking Misgovernance and Improper Equations Suppressed by Board)
The ToI report says, “What has raised eyebrows is the failure of the board to record the irregularities in the name of ‘confidentiality and sensitive information’ while submitting a report to SEBI, which came after reminders from the regulator. In fact, the NSE’s role in concealing information has also come under the lens as, a matter brought before the chairman has not been recorded, including those related to Mr Subramanian’s appointment and the sharing of crucial information by him and Ms Ramakrishna with unknown persons.” 
While the issue was not discussed formally at the SEBI board meeting on Tuesday, there was some informal conversation around it, sources told the newspaper.  
Separately, senior officials from the MoF met NSE chief Mr Limaye to discuss the recent probe findings of SEBI on various lapses at the Exchange, a report from Economic Times (ET) says.
Quoting two people aware of the matter, the newspaper says, “The ministry officials asked Mr Limaye to explain the measures that the stock exchange took when it got to know about the email exchanges with a ‘yogi’ as well as possible data leaks, while probing the co-location case years back.”
As written by Sucheta Dalal, managing editor of Moneylife, in her weekly column, "the story, more bizarre than any fiction, has been exposed in cringe-worthy detail by SEBI’s 190-page order released last Friday. In line with the now popular narrative, it shows we have two Indias. One—in which the NSE is a tech powerhouse, the largest derivatives exchange in the world with an incredible 70% operating margin and near monopoly position over India’s capital market. And another—where the same NSE has an MD who claims to communicate on email with a spiritual guru who instructs her on how to manage the Exchange—in effect the Indian rope-trick combined with modern technology and an email ID to communicate with her, but ostensibly no physical presence!" (Read: NSE Mismanagement: Chitra’s Weird Himalayan Yogi and SEBI’s Weak Order, Push India’s Image Back to Snake Charmers and Holy Men)
A forensic audit by Ernst & Young (E&Y) revealed that Ms Ramakrishna had been sharing internal confidential information about NSE’s organisational structure, dividend scenario, financial results, HR policy and related issues, and response to the regulator with a person believed to be Mr Subramanian between 2014 to 2016, even before she appointed him as a consultant. It was being done through pseudonymous email IDs, where her correspondence was to an email ID [email protected] 
SEBI’s order quotes Ms Ramkrishna’s absurd claim that she met this ‘unknown’ guru on the banks of the Ganges 20 years ago, as well as emails where she was making plans to ‘chill’ with him at Seychelles and rendezvous in Delhi.
Quoting sources, the ToI report says, “a cleanup at the NSE has been initiated and a new management has been in place for a while, but the revelations point to irregularities that date back to 2013 and even before that with the findings against Ms Ramakrishna tumbling out during the probe related to the co-location scam that was allowed by the management led by Ravi Narain, her predecessor.”
“At the same time, unlike in the case of Chanda Kochhar, where ICICI Bank asked for some of the benefits paid to her to be refunded, it may be difficult to make the same case with Ramakrishna as pecuniary gains have not been established and the SEBI order dwells into her failure to perform her duty properly,” sources told the newspaper.
Chitra Ramkrishna resigned from NSE on 2 December 2016. However, SEBI raised serious questions on how the NSE board allowed her to exit from the Exchange, despite the misconduct in appointing and sharing confidential information with an unknown person. 
“SEBI examination found that in spite of having knowledge of such grave irregularities and misconduct on the part of Chitra Ramkrishna on the appointment of Anand Subramanian in the NRC and NSE board meeting held on 21 October 2016 and knowledge of exchange of confidential information by Chitra Ramkrishna with an unknown person in the NSE Board meeting held on 29 November 2016, NSE and its NRC and board members, in the board meeting held on 2 December 2016, allowed Chitra Ramkrishna to exit through resignation despite having committed such bizarre misconduct as reflected from her email correspondence with a fictitious email address apparently belonging to Anand Subramanian without taking any action in this regard,” the order says.
Regulatory Failure
The rot at the SEBI as well as the NSE has grown over the past two decades and has been captured in our book Absolute Power: Inside Story of the National Stock Exchange’s Amazing Success, Leading to Hubris, Regulatory Capture and Algo Scam released in June 2021, which describes the complete regulatory capture and dominance of the NSE.
Read the full SEBI order here
Moneylife has been reporting the shenanigans at NSE for the past seven years. Read our coverage on the NSE algo scam here.
6 months ago
Not probing but covering up its flanks
6 months ago
CHitra has painted nice CHITaR ( Image) of NSE ; should have been honored and decorated
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