Muristek
SEBI fines NSE, ex-MDs Ramkrishna, Narain and others in key appointment case
Mukesh Ranjan
New Delhi, February 12
The Security amp; Exchange Board of India (SEBI) on Friday issued an order penalising the National Stock Exchange (NSE) and its former Managing Directors (MD) and Chief Executive Officers Chitra Ramkrishna and Ravi Narain and others for violating securities contract rules in a case related to the appointment of Anand Subramanian as group operating officer and adviser to the MD.
The capital market regulator has levied a fine of Rs 3 crore on Ramkrishna, Rs 2 crore each on the NSE, Narain and Subramanian and Rs 6 lakh on V R Narasimhan, who was the chief regulatory officer and chief compliance officer.
The SEBI in its order, which runs into 190 pages, has concluded that Ramkrishna was guided by a yogi residing in the Himalayas for the appointment of Subramanian, as the NSE's chief operating officer (COO) in 2013. The appointment cost NSE Rs 5 crore, it added.
More to the fine the SEBI has also barred the NSE from launching any new product for a period of six months.
Further, Ramkrishna and Subramanian have been restrained from associating with any market infrastructure institution or any intermediary registered with the SEBI for a period of three years, while the same for Narain is two years, it said.
Also, the SEBI has directed the NSE to forfeit the excess leave encashment of Rs 1.54 crore and the deferred bonus of Rs 2.83 crore, of Ramkrishna, which was retained by the NSE and deposit the same to its 'Investor Protection Fund Trust' within six days.
In the order the SEBI said, "Noticee no. 1 (Ramkrishna) has made incorrect and misleading submission before the NSE that the unknown person was a 'siddha-purusha' or 'paramhansa', who did not have physical persona and could materialise at will."
The SEBI said that Ramkrishna continuously shared "internal confidential information of NSE with an unknown person" whom she had never met for almost 20 years, but communicated through emails.
"Their spiritual powers do not require them to have any such physical coordinates and would manifest at will," Ramkrishna had responded to the SEBI query.
The SEBI said an email from the unknown 'Siddha-purusha' even carried the diktat that Subramanian be exempt from the contractual 5-day work week and instead be asked to come only for three days and allowed to work the rest of the time at will.
"Noticee no. 6 (Subramanian) was also an accomplice with the unknown person who influenced the decision of Noticee no. 1 (Ramkrishna) and thereby benefiting himself by being re-designated as 'group operating officer and advisor to MD' and having the compensation being paid to him increase substantially each year, upon the advice of the unknown person to Noticee no. 1," the SEBI order read.
"From the record of events of the appointment of Noticee no. 6 and substantial increase in his emoluments every year and the delegation of powers akin to that of MD and CEO, along with the e-mail exchanges between Noticee no. 1 with the unknown person where Noticee no. 6 was also a recipient, it is clear that there has been a conspiracy for the appointment and rise of Noticee no. 6 in NSE," it added.
The SEBI said that in spite of being aware of the irregularities on the appointment of Subramanian, Narain and NSE did not record the matter in the minutes of the board meeting in the name of confidentiality and sensitive information.
While Ramkrishna was MD and CEO of NSE from April 2013 to December 2016, Narain was the MD and CEO of the exchange from April 1994 till March 2013. Thereafter, he was appointed as vice-chairman in the non-executive category on the NSE's board from April 2013 and remained so till June 2017.