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Dalip Singh | New Delhi, May 12 | Updated on: May 12, 2022

Appointed favourites in key positions to run the co-location structure, said the Court

A special CBI court on Thursday denied bail to former NSE CEO Chitra Ramkrishna and former Group Operating Officer-cum advisor Anand Subramanian due to the “gravity, seriousness, enormity and magnitude” of the charges levelled against them by the CBI and noted that the duo “ran the affairs of the NSE akin to that of a private club”.

The Special CBI Judge Sanjeev Aggarwal noted various irregularities in appointment of favored persons in key positions to manage the co-location structure and simultaneously damaged investor confidence.

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The Judge, in his exhaustive 42-page order, said Ramkrishna, who joined NSE as Joint Managing Director in 2009 and remained CEO and MD from April 2013 till December 2, 2016, ran the NSE like a private club and appointed favourites, such as Muralidharan Natarajan, CTO of NSETECH, a subsidiary of NSE, who was responsible for putting in place the co-location structure.

Observing their running of the NSE, the Judge quoted Nobel Laureate Bob Dylan to signify the state of affairs: “Money doesn’t talk, it swears”. The song, part of the album ‘Alright Ma I’m only Bleeding’ released in 1964, denotes the running of the NSE under Ramakrishna and Subramanian’s watch, observed the Judge.

The Court, while rejecting their plea that the charges against them constitute administrative malfunctioning which is civil in nature and that the CBI cannot prove a criminal offense, said their actions damaged the investment climate in the country.

“The present scam may also impact the investment scenario in the country vis-a-vis foreign institutional investors , who are always looking for fair, transparent and clean stock exchange to trade with, the present case has shaken the financial conscious of every investor, whether retail, institutional or otherwise, which needs mending to restore confidence of public at large in the same,” said the Judge.

CBI chargesheet

The CBI’s Special Public Prosecutor VK Pathak’s apprehension that the two accused may try to tamper with evidence and influence the witnesses was also taken into account by Judge Agarwal to keep the accused confined in Tihar Jail. The CBI has chargesheeted the duo for criminal conspiracy under section 120 B of the Indian Penal Code and for indulging in criminal misconduct to abuse official position under section 13(1)(d) of Prevention of Corruption Act. Also turning down defence plea that the NSE was not a public authority and hence they cannot be treated as public servants, the Court remarked the regulator is a statutory body and a “state” within the meaning of Article 12 of the Constitution.

The CBI chargesheet accused Ramkrishna of abusing her official position to “illegally” and “arbitrarily” appoint inexperienced Subramanian first as chief strategic advisor and then re-designating him as GOO and advisor to her at an “exorbitant salary” which was arbitrarily increased from time to time.

Ramakrishna is alleged to have delegated substantial powers to run the exchange and did not take the approval of NSE’s Nomination and Remuneration Committee and Board for Subramanian’s re-designation as GOO on April 1, 2015, and his remuneration of ₹4.21 crore. “This granted him huge financial benefits,” CBI has charged.

According to court papers, NRC report of November 22, 2017, and NSE letter of September 14, 2018 addressed to SEBI, reveal the Board had told the former CEO that Subramanian should immediately step down because he did not have relevant experience and that his elevation and hike in salary was also not approved by them.

Published on May 12, 2022