Stocks

Co-location case: Ex-CEO Ramkrishna, others get 4 weeks to file rejoinder

Our Bureau Mumbai | Updated on September 26, 2019 Published on September 18, 2019

No further extension will be granted, says SAT; next hearing scheduled for November 27

The Securities Appellate Tribunal on Wednesday gave four more weeks to the NSE and its former officials, including CEO Chitra Ramkrishna, to file their rejoinders against the SEBI order that had barred them from the markets and fined them in the co-location case. SAT said no further extension will be granted and set the next date of hearing on November 27.

SEBI had issued a ₹1,000-crore disgorgement order against the NSE, including 12 per cent interest. Ramkrishna and three others were asked to pay back 25 per cent of their salaries drawn between 2011 and 2014 — the scam period. All of them challenged the SEBI order in SAT and managed to get an interim stay.

Apart from Ramkrishna, her former chief Ravi Narain, who was among the founding members of the NSE, was accused by SEBI for his role in the co-location scam. Also, Ajay Shah, former Finance Ministry consultant, was named by SEBI with regard to accessing preferential data, and subsequently penalised.

The case came to light in 2015 after a whistle-blower first disclosed that preferential access was given to certain brokers for trading on the NSE. The back-up servers at the NSE were used by some brokers to connect to the exchange. As those servers were not for routine use by other brokers, there was no traffic. Hence, those connecting to these back-up services got faster trading data and feeds and could gain advantage over others.

The NSE recently withdrew its show-cause notice against New Delhi-based OPG Securities, alleged to have played a key player in the co-location case, citing legal difficulties in taking action. The NSE cited SEBI’s action against the broker and even a few others in the same matter in a different segment.

Last month, SEBI had exonerated three former executives of the NSE in the co-location case. Subramanian Anand, who served as Chief Strategic Officer (between April 2013 and March 2014) and Group Operating Officer (April 2014 to October 2016), Umesh Jain (October 2012 to June 2015) and Ravi Apte (2007 to September 2012), served as Chief Technology Officers. They were accused of failing to perform their duties in establishing adequate systems and having shown laxity and dereliction of duty by not taking adequate steps to make the exchange’s facility robust and prevent it from being manipulated.

Published on September 18, 2019
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