Chitra Ramkrishna, the high-profile and powerful CEO and MD of India’s largest stock exchange, National Stock Exchange (NSE), between 2013 and 2016, was arrested by the CBI today for her alleged role in the co-location scam at exchange. This is the first big arrest CBI has made in four years after it filed a first information report (FIR) in 2018.
Ramkrishna was appointed the MD and CEO of NSE on the basis of a strong recommendation made by Ravi Narain, NSE’s longest the longest-serving boss and Ramkrishna’s predecessor. Now, both Narain and Ramkrishna are under the CBI scanner. Ramkrishna was a chartered accountant who joined the exchange from IDBI, while Narain is a graduate of the Wharton Business School.
The NSE co-location scam has many facets. It involves data theft, and is likely to bring the actions of almost the entire senior management of the exchange in charge of key portfolios between 2009 and 2016 under scrutiny . NSE officially started co-location in January 2010 but it was sharing crucial data with professors at the Mumbai-based research institution Indira Gandhi Institute of Development Research (IGIDR) long before that. This too is being investigated by the CBI.
CBI’s investigation centres around the faulty trading infrastructure at NSE that gave preferential treatment to a clutch of brokers.