CKG Nair, Member, Securities and Appellate Tribunal (SAT), has recused himself from hearing matters related to the co-location issue at the NSE on the back of potential conflict of interest.

Key issues affecting Nair’s position are the fact that his daughter is working with the NSE and he was working with the capital market division in the Finance Ministry and could have been part of decision-making affecting the exchanges and its regulation. Nair has also been a member of the SEBI committee and played a key role in advising on policy matters in commodity futures market. SEBI is now the regulator for both equity and commodity markets. Almost all of them affected by SEBI’s orders have to first approach SAT.

Those who are parties to recent SEBI orders in the co-location case have appealed against the regulator’s order in SAT. Nair is one of the three officials tasked with hearing petitions in SAT. There are two other officials -- Tarun Agarwala and MT Joshi at SAT, who unlike Nair, have judicial background as they are retired high court judges.

Deepan Uday, a Chennai-based advocate, on May 4 had filed a complaint against Nair in SAT highlighting conflict of interest in the member hearing the co-location-related cases.

BusinessLine is also in possession of another complaint by Uday made to SAT and the government dated October 25, 2018, which too had highlighted conflict of interest at Nair’s appointment to SAT. On May 1, SAT had set aside an order against Delhi-based OPG Securities that involved its dispute with the NSE in co-location matter. The directions issued by SAT shows Nair was one of the members hearing this case.

SAT’s viewpoint

Replying to BusinessLine , SAT said, “The recusal of hearing of the co-location matter by Nair was not because of the complaint dated 4/5/19 but was on account of the fact that some of the impugned orders had been passed against the NSE where his daughter is working. The recusal of Nair was done much before May 4.”

SAT further said, “Nair’s daughter was appointed at the NSE in 2013, a fact which was known to the Finance Ministry when he was appointed member of the tribunal in 2016 during the time of the present government. It is not open for the tribunal to make any comments on the allegations made by the alleged complainant at this stage unless it is made on an affidavit.”

SAT said that two complaints of 2018 and 2019 have different signatures and, therefore, SAT had directed the complainant to file an affidavit and proof of credentials.