New Delhi: The Central Bureau of Investigation Tuesday filed the final chargesheet in the National Stock Exchange (NSE) co-location scam case involving its former managing director Chitra Ramkrishna, ThePrint has learnt.
In the latest chargesheet filed at Delhi’s Rouse Avenue court, the agency has submitted fresh evidence along with a list of broking firms which, the agency suspects, benefited from the alleged scam, sources in the agency told ThePrint.
“The fresh chargesheet introduces names of brokers which benefited from the conspiracy hatched in the NSE co-location matter. This aspect of the investigation was kept pending in the last chargesheet,” an official privy to the case details told ThePrint.
The case originated in May 2018 when the agency booked Delhi-based brokerage firm OPG Securities Pvt Ltd, its owner Sanjay Gupta, his relatives and unknown officials of the NSE and the Securities and Exchange Board of India (SEBI) on charges of compromising the NSE’s server architecture under the co-location scheme.
In this scheme, the NSE had allowed brokers to place their computers in the same area where the NSE servers were located. This setup was designed to provide brokers under this scheme with a substantial speed advantage over other brokers.
While the scheme allowed this officially, it is alleged that some broking firms and NSE officials conspired to take undue advantage of the arrangement.
Under this conspiracy, the agency was informed, Gupta allegedly colluded with NSE officials, who passed on information related to switching on time of the NSE exchange servers, as well as providing him access to servers equipped with the latest technology and the least crowded.
This, the agency believes, allowed Gupta’s firm access to trade information before other brokers, which put them, even those subscribed to the co-location scheme, at a disadvantage.
The real impetus in the case, however, came after the agency arrested Ramkrishna in March 2022 for allegedly compromising the sanctity of the NSE. She was the MD and CEO of NSE during the relevant period when the alleged scam took place.
The Ministry of Finance had requested the agency to probe her role in the wake of a SEBI order against the appointment of a person named Anand Subramanian as chief strategic advisor (CSA) to Ramkrishna, the then MD. He was later redesignated by Ramkrishna as ‘Group Operating Officer and Advisor to MD’. Ramkrishna also allegedly shared internal confidential information of the NSE with an unknown person.
Days after the SEBI order, the agency questioned Subramanian. He was arrested in February 2022, weeks before Ramkrishna’s arrest. The agency arrested brokerage firm owner Gupta in the same case in June 2022.
The CBI registered another case in May that year against several other brokers, such as SMC Global Securities Limited, Shaastra Securities Trading Private Limited, and iSec Services Private Limited, on similar charges of compromising the sanctity of India’s biggest stock market exchange. However, the agency could not find any criminality in their actions and filed a closure report in the case, which was accepted by a Delhi court last month.
In its chargesheet against Ramkrishna and Subramanian, the agency submitted that the idea of co-location was conceptualised and implemented during her tenure as NSE’s joint managing director (JMD) from 2009 to March 2013. She was elevated to MD and CEO of the stock exchange and served from April 2013 to December 2016.
“Investigation conducted so far has established that during the period 2010-15 (i.e. when the accused Chitra Ramkrishna was managing the affairs of NSE), OPG Securities had connected to the secondary POP server on 670 trading days in the Futures & Options segment. Investigation regarding allegations of preferential access granted to certain brokers by officials of NSE and undue gains made out of it, during the tenure of Chitra Ramkrishna and Anand Subramanian, is underway,” the agency had alleged in its chargesheet filed in April 2022.
Counsels of both Ramkrishna and Subramanian have denied these allegations before court during hearing of their bail petitions before the court.
(Edited by Ajeet Tiwari)
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