Chitra Ramkrishna, NSE’s ex-MD, was taken into seven-day CBI custody in a count of co-location fraud

The CBI arrested Chitra Ramkrishna Sunday after her preliminary bail application was denied

The CBI arrested Chitra Ramkrishna Sunday after her preliminary bail application was denied

A court in Delhi on Monday granted the Central Bureau of Investigation (CBI) a seven-day pre-trial hearing of former National Stock Exchange (NSE) chief executive officer Chitra Ramkrishna in the NSE collocation fraud case.

Special Judge Sanjeev Aggarwal issued the order after hearing arguments from the CBI and the attorney who appeared for the accused.

The investigating authority had requested their 14-day interrogation.

The CBI arrested the defendant on Sunday after her request for bail was denied by the court on Saturday.

In its application to the court, the CBI claimed that the electronic devices found would be analyzed and used for further investigation of Ms. Ramakrishna.

It was alleged that she was evasive and continually misled the investigating officer and made false statements.

The CBI claimed that her interrogation in prison was necessary to uncover the criminal conspiracy and the role of other NSE officers and brokers in the company.

“She must also be confronted with co-defendant Anand Subramanian, who is already in CBI police custody, to understand the scale and scope of the criminal conspiracy. It must also be confronted with digital evidence on record,” the authority told the court.

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The CBI further submitted that the material already collected in the present case shows that Ramkrishna, in conspiracy with Mr Subramanian, hired him illegally by pressuring the NSE’s Human Resources (HR) department.

“Thereafter, in conspiracy with Mr. Subramanian, she influenced NSE officials to facilitate his access to important NSE decision-making processes. During the same period, M/s OPG Securities took undue advantage in NSE by logging into a secondary server,” it said.

The CBI said that during Ms. Ramkrishna’s tenure as Joint MD, NSE, the co-location was conceived and implemented.

Ms. Ramkrishna was appointed MD and CEO of NSE on April 1, 2013.

“Investigations have revealed that OPG Securities Pvt Ltd connected to the secondary server of the COLO-TBT dissemination server for over 300 trading days in the period from 2013 to 2016, after the defendant Chitra Ramakrishna assumed the position of MD & CEO of NSE was allowed to produce what led to unfair gain,” it said.

It is further alleged that in 2012 OPG Securities Pvt Ltd was repeatedly warned that accessing the secondary server was in breach of NSE rules/policies, it said.

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“However, NSE stopped issuing such warnings to OPG Securities without good reason in 2013, when Ramkrishna was Managing Director and CEO of NSE. The investigation also revealed that Muralidharan Natarajan, the CTO of NSETECH (a subsidiary of NSE), was responsible for setting up the co-location architecture at NSE. He reported to Mrs. Ramakrishna,” the authority told the court.

It was further alleged that Ms. Ramkrishna e-mailed NSE internal confidential information, including its organizational structure, dividend scenario, financial results, personnel policy and related issues, response to the regulator, future projects, etc. during the period -ID passed on 2013 to 2016.

“An investigation is underway with whom all this information was further shared,” it said.

The CBI further alleged that Ms. Ramkrishna, in conspiring with co-accused Anand Subramanian, abused her official position as Managing Director of NSE and appointed him her Chief Strategic Advisor/Consultant, creating that Chief Strategic Advisor post to house him and to appoint Mr. Subramanian by passing the required due process at the NSE.

It was said that Ms. Ramkrishna, in a conspiracy with Mr. Subramanian, promoted him to Group Operating Officer (GOO) and Advisor to MD&CE0 in a very short period of time, and also entrusted him with the roles and responsibilities of an executive position higher in the hierarchy as the heads of department and one level below the MD & CEO and reports directly to her.

He was also given significant management powers, similar to powers granted to the then-CEO & MD, the CBI said.

“The investigation also found that Ms. Ramakrishna’s disclosure of confidential trading data to Infotech Financial Services Pvt. ltd and Ajay Shah, knowing that Infotech Financial Services Pvt. Ltd provided algorithmic software to brokers in the NSE and that there has been a conflict of interest since one of the directors of M/s Infotech Financial Services Pvt, Ltd,” it said.

In the co-location facility offered by the NSE, brokers could place their servers on the exchange’s premises, giving them faster access to the markets.

It is alleged that some brokers, with the connivance of insiders, have abused the algorithm and co-location facility to generate unexpected profits.

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