Explained I SEBI’s order against former NSE CEO Chitra Ramkrishna
The Hindu
SEBI’s order also reminded of the Bombay High Court’s observation in the MCX Stock Exchange vs SEBI (March 2012) dispute that referred to the exchanges the “first layer of oversight”
The story so far: National Stock Exchange (NSE)’s former Managing Director (MD) and Chief Executive Officer (CEO) Chitra Ramkrishna is accused of misusing her office for making inapt appointments, failure to conceal confidential information pertaining to operations of the exchange, and making incorrect and misleading submissions to the Securities and Exchange Board of India (SEBI). The regulator states that her unknown spiritual guru influenced her decision making.
The Central Bureau of Investigation (CBI) has questioned her and issued lookout circulars against the former CEO, her predecessor Ravi Narain and former Group Operating Officer (GOO) Anand Subramanian.
Ms. Ramkrishna was appointed the MD and CEO of the exchange on April 1, 2013. She appointed Mr. Subramanian as the Chief Strategic Officer (CSO) of the exchange despite the latter not having any exposure to capital markets. He worked as the Vice President of Leasing and Repair Services at Transafe Services Pvt Ltd, a wholly owned-subsidiary of Balmer & Lawrie.
SEBI notes that Mr. Subramanian’s previous work experience was not relevant to his new consultancy position at NSE. His annual salary at his previous workplace was ₹15 lakh, which rose significantly to ₹1.68 crore at NSE. Moreover, he was expected to work four days a week. With recurrent appraisals and performance ratings, his compensation rose to ₹4.21 crore within two years. He was now asked to work for five days a week and was re-designated as the GOO and Advisor to MD.
SEBI notes that the exchange had not advertised any vacancy pertaining to the appointment of CSO.
The regulator found the former NSE Chief guilty of divulging confidential information pertaining to the NSE’s organisational appointments, financial results and projections, dividend pay-out ratio and board meeting consultations to her unknown spiritual guru.
The NSE Board was found guilty of not informing the markets regulator and opting to keep it under wraps. It asked Ms. Ramkrishna to surrender her office in December 2016 and Mr. Subramanian on October 2016.
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