The National Stock Exchange or the NSE has a combined market capitalisation of $4 trillion and is the largest stock exchange in India. The NSE’s former CEO and MD is now under scrutiny for allowing a ‘Yogi’ to virtually operate the entire stock exchange and seeking advice in important and confidential matters.
Chitra Ramkrishna, the former CEO and MD of NSE was guided by a ‘Yogi’ who lives in the Himalayas when it came to appointing Arvind Subramanian (a relatively unknown person) as the exchange’s chief operating officer back in 2013. The move cost the NSE a whopping Rs 5 crores.
The former CEO has been accused of sharing with him information such as the NSE’s five-year projection, financial data, dividend ratio, business plans, agenda of board meetings and even consulted him for employee appraisals.
Chitra Ramkrishna was removed from her office in 2016 for her involvement in co-location and an algorithm trading scam as well as abuse of power while appointing Subramanian. The probe against her found out that she operated the NSE with impunity.
Moreover, it was found that no one from the senior management, board or the promoters (which include big government institutions and banks) objected to her methods. Instead, she was ‘rewarded’ handsomely as she was given Rs 44 crores as pending ‘dues and salary’ when she left the NSE.
During SEBI’s probe, it was found out that the former head communicated with the yogi, whom she never met, over emails for almost 20 years! Moreover, she did not deny the emails and said the yogi did not have any physical coordinates and could ‘manifest’ at will.
The probe further revealed that Subramanian had the perks of a CEO and an MD, such as flying first class, having his own office and so on. He even received preferential treatment when it came to appraisals as he got a 20% increment on his salary of Rs 1.68 crores, taking it to Rs 2.01 crores.
He soon got an increment of 15% which led to his salary increase from Rs 2.01 crores to Rs 2.31 crores! Furthermore, Ramkrishna dubbed his performance as A+ (exceptional) while his cost-to-company had risen to Rs 5 crores.
One may think that SEBI might have gone down on her and punished her hard. However, her punishment was not much and was barred from participating in the capital markets for three years and directed the NSE to forfeit the excess encashment of Rs 1.54 crore and the deferred bonus of Rs 2.83 crores.
References: The Hindu Business Line