Chitra Ramakrishna, the former Managing Director and Chief Executive Officer (CEO) of the National Stock Exchange (NSE), was once one of the most celebrated icons of the Indian stock market. She was appointed to head the NSE, the first female to do so. She was one of the five individuals who were handpicked by late SS Nadkarni, who was then the IDBI chairman, to build up the NSE from scratch. The NSE has achieved great financial heights as it is world’s largest derivatives exchange. But Ms. Ramakrishna has fallen from grace ever since she resigned from the NSE board over allegations of financial misconduct in 2016. Here’s an explainer detailing the rise and fall of Chitra Ramakrishna.
1. Ernst & Young (E&Y) conducted a forensic audit on the Co-location (Colo) scam in 2015 which revealed that Chitra Ramakrishna, the then head of the NSE, shared sensitive, confidential information regarding the exchange’s key appointments, financial results, organizational structure as well as sought advice on internal matters with a certain individual with an email ID [email protected].
2. This information was corroborated by another inquiry ordered by the Securities and Exchange Board of India (SEBI). The inquiry revealed that this individual was referred to as “swami ji”. “Company (NSE) is run on your blessings alone,” read another mail. The enquiry, released last week, notes that this Ms. Ramakrishna met this guru on the banks of river Ganga 20 years ago. The emails reveal that she had also made plans to “chill” with this individual in Seychelles.
3. SEBI last week penalized Ms. Ramakrishna for sharing critical, sensitive information to this unknown individual. SEBI fined Ms. Ramakrishna a penalty of INR3 crore. Sebi has also ordered the NSE to forfeit Ms Ramakrishna’s leave encashment of INR1.54 crore and the deferred bonus of INR2.83 crore. She has been directed to pay the penalty in 45 days from the order.
4. The SEBI order also questions the curious appointment of Anand Subramanian as a chief consultant officer in 2014 (CSO with an annual salary of INR1.68 crore) and then the Group Operating Officer (GOO) and MD (when his annual compensation rose to INR4.21 crore) in 2016 by Ms. Ramakrishna without even being notified as a key management person. “… his evaluation did not go through the HR (human relations) process and was decided by Ms Ramakrishna alone… He also availed of perks that were not given to any other consultant; he travelled first class around the world, often accompanying Ms. Ramakrishna and was allowed to spend two to three days a week in Chennai, where his wife was also employed by the Exchange,” the report further says. Subramanian's salary hike was guided by the “yogi” as well.
5. “SEBI examination found that in spite of having knowledge of such grave irregularities and misconduct on the part of Chitra Ramkrishna on the appointment of Anand Subramanian in the NRC and NSE board meeting held on 21 October 2016 and knowledge of exchange of confidential information by Chitra Ramkrishna with an unknown person in the NSE Board meeting held on 29 November 2016, NSE and its NRC and board members, in the board meeting held on 2 December 2016, allowed Chitra Ramkrishna to exit through resignation despite having committed such bizarre misconduct as reflected from her email correspondence with a fictitious email address apparently belonging to Anand Subramanian without taking any action in this regard,” the SEBI order said.
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6. Ms. Ramakrishna has refused to name this “yogi” and has reportedly said that this individual is a “spiritual force”, as per SEBI report. “There appears to be a glaring conspiracy of a money making scheme that involves Noticee no. 1 (Ramkrishna) and 6 (Subramanian) with the unknown person (yogi) by which Noticee no. 1 would increase the compensation granted to Noticee no. 6 and Noticee no. 6 would then pay the unknown person from such increased compensation," Sebi noted the alleged financial connivance between Ms. Ramakrishna, Mr. Subramanian and the “yogi”.
7. The Income Tax department on Thursday conducted searches on the premises on M.s Subramanian’s residence for making illegal monetary gains and sharing of sensitive information with unqualified individuals at her Mumbai residence. The CBI issued lookout notices to Ms. Ramakrishna, Mr. Subramanian and Mr. Ravi Narain on Friday. Widening the probe ambit, the CBI has also started questioning Ms. Ramakrishna on Friday, according to media reports.
