New Delhi: A Delhi court Monday sent former managing director and chief executive officer of National Stock Exchange Chitra Ramkrishna to 7-day CBI custody in the NSE co-location scam case, saying her custodial interrogation was required for fair and proper investigations.
Special Judge Sanjeev Aggarwal passed the order after hearing arguments from CBI and the counsel appearing for accused.
“It appears that the custodial interrogation of the above accused would be required to find out the detailed modus operandi adopted by her in conspiracy with the other co-accused persons involved in the present case including co-accused Anand Subramanian. The present case may be of unimaginable magnitude,” the court said.
It further said that her custodial interrogation would also be required for confronting her with Subramanian, who is already in police custody, in order to find out the entire ramifications of the transactions in question, to dig out the voluminous digital evidence pertaining and to find out the role of other players in this case of swindling the institutional investors, foreign institutional investors and honest retail investors.
“Therefore, police custody remand of this accused is required for fair and proper investigations, as there are more than reasonable and substantial grounds for doing so… In these peculiar facts and circumstances, in the interest of justice and for fair investigations, accused Chitra Ramkrishna is remanded to police custody till March 14, 2022. She be produced before the Court on March 14, 2022,” the judge said.
The probe agency had sought her 14-day custodial interrogation.
The CBI arrested the accused on Sunday after her anticipatory bail application was dismissed by the court on Saturday.
In its application before the court on Monday, the CBI alleged that the electronic devices recovered are being analyzed and would be used for conducting further examination of Ramakrishna.
It alleged that she was evasive and has continuously misguided the Investigation Officer and gave wrong statements.
It said her custodial interrogation was needed to unearth the criminal conspiracy and the role of other NSE officials and brokers in the company.
She is required to be confronted with Subramanian to understand the magnitude and scope of the criminal conspiracy and also to be confronted with digital evidence available on record, the agency told the court.
The CBI was represented by its Additional Legal Advisor V K Sharma and Senior Public Prosecutor V K Pathak, while senior advcoate Trideep Pais appeared for the accused.
It further submitted that the material already collected in the case shows that Ramkrishna in conspiracy with Subramanian had improperly hired him by coercing the HR department of NSE.
Thereafter, she in conspiracy with Subramanian influenced the officials of NSE to facilitate him in having access to important decision making processes of the NSE. During the same period M/s OPG Securities was gaining undue advantages in NSE by logging into secondary server, it said.
The CBI said that during Ramkrishna’s tenure as Joint MD, NSE, the co-location was conceptualized and implemented.
Ramkrishna was appointed as MD and CEO of NSE on April 1, 2013.
Investigation has revealed that during the period 2013-16 after accused Chitra Ramakrishna took over as MD & CEO of NSE, OPG Securities Pvt Ltd was allowed to connect to secondary server of the COLO-TBT Dissemination server for over 300 trading days causing it undue gain, it said.
It is further submitted that OPG Securities Pvt Ltd was warned repeatedly in 2012 that accessing the secondary server is a violation of the rules/guidelines of the NSE, it said.
NSE however stopped issuing such warnings to OPG Securities without any justifiable reasons during 2013 when Ramkrishna was MD & CEO of NSE.
Investigation has also revealed that Muralidharan Natarajan, the CTO of NSETECH (a subsiiary of NSE), was responsible for putting in place the co-location architecture at NSE. He was reporting to Ramakrishna, the CBI told the court.
It further alleged that Ramkrishna had shared internal confidential information of NSE including its Organizational Structure, Dividend scenario, Financial Results, Human Resources Policy and related Issues, Response to Regulator, Future projects etc. to an e-mail ID during the period 2013 to 2016.
With whom all this information was further shared, is under investigation, it said.
The CBI further alleged that Ramkrishna, with Subramanian, abused her official position as the MD of NSE and got him appointed as her Chief Strategic Advisor/ Consultant by creating this post of Chief Strategic Advisor to accommodate and appoint him by passing the prescribed due procedures at NSE.
It said Ramkrishna, in conspiracy with Subramanian, in a very short period elevated him to the post of Group Operating Officer (GOO) and Advisor to MD & CE0 and he was also entrusted with the roles and responsibility of a senior executive position standing higher in hierarchy to the heads of departments and one level below the MD & CEO, reporting directly to her.
He was also delegated with substantial power of management akin to the powers granted to the then CEO & MD, the CBI said.
The investigation has also revealed that Ramakrishna facilitated providing confidential trading data to Infotech Financial Services Pvt. Ltd. and to Ajay Shah, knowing fully well that Infotech Financial Services Pvt. Ltd was providing algorithmic software to brokers in NSE and that there was a conflict of interest since one of the directors of M/s Infotech Financial Services Pvt, Ltd, it said.
In the co-location facility offered by the NSE, brokers could place their servers within the stock exchange premises giving them faster access to the markets.
It is alleged that some brokers in connivance with insiders abused the algorithm and the co-location facility to make windfall profits.
The remand application was opposed by Pais, who said that the she has already joined the investigation on a number of dates with CBI, in response to notices and she has even been confronted with co-accused Subramanian.
“She has fully cooperated in the investigation and, therefore, no ground for police custody remand is made out,” he said.
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Also read: Anand Subramanian arrested by CBI from Chennai in NSE co-location case