NSE Fraud: CBI Arrests Anand Subramanian
Moneylife Digital Team/IANS 25 February 2022
The Central Bureau of Investigation (CBI) has arrested Anand Subramanian, the former group operating officer of National Stock Exchange (NSE), from Chennai on the intervening night of Thursday and Friday.
 
A source told IANS that he will be produced before the concerned court. The federal probe agency will seek his custodial remand.
 
Recently, his statements were recorded for three consecutive days in Chennai. But, he was evasive throughout the questioning, sources said.
 
Mr Subramanian was brought to the NSE by Chitra Ramkrishna, former managing director (MD) and chief executive officer (CEO) and he reportedly had access to the email ID on which the emails were sent to Himalayan Yogi with whom the classified information was shared.
 
The CBI recently raided the Securities and Exchange Board of India (SEBI) office and recovered some incriminating documents, including digital documents.
 
"These are crucial documents and evidence nailing the lies of the alleged accused involved in the case. We are in the process of making a foolproof case against all the accused. These will help the prosecution in proving our case when it goes to court," the source told IANS.
 
Chitra Ramkrishna resigned from NSE on 2 December 2016. However, SEBI in its 11th February order 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.
 
The SEBI order tabulates and documents the extraordinary rise of Anand Subramanian, with the connivance of the NSE board, without declaring him a key management person (KMP) even while he was appointed on the boards of NSE’s subsidiary companies and almost every decision of the Exchange, since his appointment as a consultant, was routed through him. He also availed of perks that were not given to any other consultant; he travelled first class around the world, often accompanying Ms Ramakrishna and was allowed to spend two to three days a week in Chennai, where his wife was also employed by the Exchange. 
 
More importantly, his evaluation did not go through the HR (human relations) process and was decided by Ms Ramakrishna alone. It is a scandal that all this was unknown to the regulator, although NSE is a highly regulated and very sensitive market institution.
 
After receiving the complaints, SEBI, four times in 2016, asked NSE to clarify if Anand Subramanian had been designated as KMP. Mr VR Narasimhan, the then CRO, told SEBI that there was no violation of Securities Contracts (Regulations) (Stock Exchanges and Clearing Corporations) Regulations, 2012 (SECC Regulations) in the appointment of Mr Subramanian and the MD, being a competent authority, had appointed him.
 
Earlier this week, finance minister (FM) Nirmala Sitharaman had told the media that he Union government is looking at the lapses that took place at the NSE. 
 
In an interview to Economic Times, Ms Sitharaman says the Union government is examining the matter to determine if the SEBI has taken ‘necessary punitive’ action in the case. 
 
“…the government was analysing if there had been ‘enough application of mind in dealing with this’ on the part of the market regulator, and if after applying its mind, SEBI took adequate corrective steps. The government will not entertain or tolerate any perception among investors about opaqueness and credibility at institutions,” the FM told the newspaper.
 
Market regulator SEBI recently penalised Chitra Ramkrishna, former managing director (MD) and chief executive officer (CEO) of NSE for passing sensitive information about the Exchange to an unknown or faceless spiritual force residing in the Himalayas.
 
In an order issued on 11 February 2022, SEBI barred Ms Ramkrishna, Ravi Narain, former vice-chairman and Anand Subramanian, former GOO and adviser 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. 
 
Based on the 192-page order passed by the SEBI, the CBI had already lodged a first information report (FIR) against Ms Ramkrishna. 
 
Anand Subramanian was asked to resign in October 2016 and the drama of his removal has been documented by Moneylife editors Sucheta Dalal and Debashis Basu in their 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. SEBI had been sitting on this information since 2014 and has issued its order only now.
 
 
Comments
cvkakatkar
2 years ago
Great work Money Life - am proud to be a member of such a righteous org.
sharereasearchreports
2 years ago
Thanks for all your efforts Sucheta and Debasis. Investigating agency should take a court order and reach out to Microsoft and get usage details of [email protected] email including dump of all emails sent and received on this email address. To find the name of the person using this email address should not take couple of minutes. Microsoft would be able to give the exact geolocation co-ordinates from which this email was accessed including the mobile number if used on phone or IP address if using laptop / desktop / tablet.
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