The Enforcement Directorate has recently recorded the statement of former NSE managing director and chief executive officer Chitra Ramkrishna, lodged inside Delhi’s Tihar jail, as part of a money laundering investigation against her and others, officials said Tuesday.
The proceedings for recording the statement were conducted on two occasions inside the jail. The statement has been recorded under the criminal sections of the Prevention of Money Laundering Act (PMLA), they said.
Chitra Ramkrishna was detained by the Central Bureau of Inquiry (CBI) on March 6 in connection with the suspected National Stock Exchange (NSE) co-location scam and an investigation into other governance violations at the market. She is being held in the Tihar jail. This case is also being investigated by the Enforcement Directorate, a federal investigation body. The Internal Revenue Service is the third department looking into the allegations of irregularities at the National Stock Exchange.
Apart from the recent disclosures related to alleged governance lapses in the appointment of Anand Subramanian as the chief strategic advisor and his re-designation as group operating officer and advisor to the then MD, the ED’s money laundering probe relates to alleged irregularities in the NSE co-location case (Ramkrishna).
In early 2015, the Securities and Exchange Board of India (SEBI) launched an investigation into the co-location matter after a ‘whistle-blower’ revealed that some brokers were allegedly getting preferential access through co-location, early login, and ‘dark fiber,’ which can give a trader split-second faster access to an exchange’s data feed. Brokers could use this facility to host their servers on the premises of the stock exchange, providing them speedier access to the markets. Some brokers are accused of abusing the algorithm and the co-location facility to achieve windfall profits in collusion with insiders.
On April 1, 2013, Chitra Ramkrishna was promoted as MD and CEO of the exchange, and she left in 2016.
According to the CBI, co-location was started by NSE around this time period.
After a report from market regulator Sebi on February 11, the central agencies’ action against Chitra Ramkrishna, Subramanian, and others was renewed.It accused Chitra Ramkrishna and others of claimed governance failures in Subramanian’s hiring as top strategic advisor and subsequent re-designation as group operating officer and MD’s advisor.
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