NSE’s controversial former MD and CEO Chitra Ramkrishna got an interim relief from the Securities Appellate Tribunal (SAT) in the Himalayan Yogi case on the arguments of her lawyer that market regulator SEBI did not follow the principle of natural justice before passing the order.  

SAT said that if Ramkrishna deposited ₹2 crore into an escrow account within six weeks, the balance amount will not be recovered from her during the pendency of the appeal.

Advice from Guru

Ramkrishna has told SAT that she merely sought advice from her spiritual Guru and SEBI order did not mention if she was doing the same without applying her mind or reasoning. Ramkrishna has also told SAT that SEBI nowhere states that the information she passed to her Guru was misused or has caused a loss to any of the stakeholders. The SEBI order of February 11 against Ramkrishna had attracted huge attention since it mentioned that Ramkrishna was taking instructions from an unknown Himalayan Yogi to run the exchange. 

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SEBI had penalised NSE, Ramkrishna and her predecessor Ravi Narain for governance lapses in appointing Anand Subramanian as the exchange’s group operating officer (COO) and advisor to Ramkrishna. The order detailed how an unknown person, whom Ramkrishna referred to as a Yogi was directing her in crucial appointments, portfolio allotments and was guiding her on ways of influencing bureaucrats in Delhi.

She was fined ₹3 crore by SEBI, which held her in violation of governance norms.  SEBI had also directed NSE to forfeit Ramkrishna’s excess leave encashment of ₹1.54 crore and the deferred bonus of ₹2.83 crore. SEBI had directed NSE to retain and deposit the same in its investor protection fund. SAT has directed NSE to deposit ₹4.73 crore towards leave encashment and deferred bonus of the Ramkrishna in an escrow account instead of investor protection fund. SAT has also directed SEBI to submit its reply.

Ramkrishna is currently lodged in Tihar jail after she was sent to judicial custody by New Delhi’s CBI court. CBI arrested her with regard to a 2018 first information report in the NSE co-location scam. 

The argument

Ramkrishna’s lawyers argued that SEBI had no powers to interfere in the autonomy and internal management of NSE and urged SAT to set aside SEBI’s order during the pendency of appeal. It was also urged that after SEBI closed its hearing, a fresh opportunity was given to the Ramkishna to cross-examine certain witnesses but after providing the opportunity to crossexamine no further date for hearing was fixed by the SEBI whole time member. Hence, Ramkrishna’s lawyers said that SEBI WTM proceeded to pass the impugned order without granting an opportunity of hearing which was violative of Article 14 Constitution of India.  

SAT members Tarun Agarwala and Meera Swarup told Ramkrishna’s lawyers that all these questions will be considered at the time of hearing the appeal. Ramkrishna’s counsel CS Vaidyanathan contested Sebi’s decision to impose penalty under the Section 23A of the Securities Contracts Regulation Act (SCRA). He argued that provision came into effect from January 2020 and couldn’t be applied retrospectively. As a result, imposing a penalty under this section was “incorrect and could not be sustained”.

The next hearing is likely to be held on June 30.