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Our Bureau | New Delhi, May 21 | Updated on: May 21, 2022

Raids to gather evidence for supplementary chargesheet against former NSE Chief

The CBI on Saturday carried out searches at ten locations primarily of brokers who allegedly benefited from the NSE Co-location scam. The role of more than 10 traders have come under CBI scanner widening the scope of the probe, said agency sources.

The CBI raids at Delhi, Gurugram, Mumbai, Kolkata and Gandhinagar were said to have been aimed at gathering evidence to support a supplementary chargesheet that the agency is reportedly aiming to file on the main allegation of rigging of co-location by former NSE CEO and MD Chitra Ramakrishna to favour a few brokers.

In the first chargesheet, the CBI had focused on irregularities committed on appointment and subsequent elevation of former Group Operating Officer Anand Subramanian. His recruitment and fat salary were in violation of a NSE Board order, the CBI has said in its chargesheet. The board had directed that Subramanian should step down for failing to meet the requisite experience to get on board the NSE, the BusinessLine had reported on May 12 when bail was denied to both the accused by Special CBI court. Ramakrishna has approached Delhi high court for bail.

It had also emerged in the chargesheet that Anand was operating an email id for conversation with Ramakrishna. In May of 2018, the CBI had lodged an FIR accusing OPG Securities, a Delhi-based broker firm, of using an algorithmic trading software for getting preferential access to the exchange server data over a period of four years from 2010. Due to connivance with the NSE data centre staff, the company was pushed to an advantageous position.

OPG, therefore, got faster data access to the NSE’s secondary exchange in comparison to other brokers, the CBI had alleged. “It was also alleged that unidentified officials of NSE, Mumbai had provided unfair access to the said company using the co-location facility during the period 2010-2012 that enabled it to log in first to the exchange server of the stock exchange that helped to get the data before any other broker in the market,” the CBI FIR read.

In fact, as per the probing agency, the NSE under Ramakrishna, passed on a trading date to Infotech Financial Services which allowed the firm to develop algorithm for trading products for participants of securities market. A CBI court, while denying bail, had stated that the “software was in turn, sold to various trading members, thereby giving them undue advantage”.

Ramakrishna, Subramanian and unknown others, alleged the CBI, have violated provisions of the SEBI Act, 1992, by offering dark fibre and leased line connectivity to certain stock brokers.

Published on May 21, 2022