CBI arrests Anand Subramanian, ex-top official of NSE and advisor to Chitra Ramkrishna
NEW DELHI: FEB. 25 – Former group operating officer (GOO) of the National Stock Exchange (NSE) Anand Subramanian has been arrested by the Central Bureau of Investigation (CBI) in connection with its probe into a 2018 case of manipulation of the bourse.
“Subramanian was arrested by a team of officials in Chennai late on Thursday night. He will be produced in a competent court today,” a CBI official said.
CBI had earlier questioned Subramanian for three days ending the interrogation on February 21. It has already questioned former MD-CEO Chitra Ramkrishna and former CEO Ravi Narain. While Ramkrishna’s questioning took place last Friday, Narain was questioned last Saturday.
Earlier this week, a team of CBI also visited the Securities and Exchange Board of India (Sebi) office in Mumbai and collected documents related to the case.
The interrogations, according to CBI, were being made in light of a Sebi report that said Ramkrishna had been sharing confidential NSE information with a “Himalayan Yogi” and indicted her for Subramanian’s appointment in contravention of rules.
In an order two weeks back, Sebi penalised Ramkrishna and a few others for allegedly violating securities contract rules in the appointment of Subramanian as GOO and advisor to the MD. Sebi said she was steered by a “yogi” in the appointment of Subramanian.
Following the report, the Income Tax Department searched the residences of Ramkrishna and Subramanian as part of its probe into the allegations of illegal gains made by passing on internal exchange information to a third party.
The 2018 case pertains to charges of preferential access to the trading system to some brokers, through the co-location facility (where brokers can buy “rack space” for their servers) at the NSE, early login and “dark fibre”, which can allow a trader split-second faster access to the data feed of the exchange. Even a split-second edge is considered capable of bringing huge gains to a trader.
The CBI had booked Sanjay Gupta, owner and promoter of Delhi-based OPG Securities Pvt Ltd, and others in the case. According to CBI, between 2010 and 2014, Gupta abused the NSE server architecture, in criminal conspiracy with unknown officials of NSE, and even bribed SEBI officials.
“Gupta, with the help of his brother-in-law Aman Kokrady and other unknown persons, managed the data centre staff of NSE, who passed the information regarding switching on time of NSE exchange servers. Further, unknown officials of NSE gave OPG Securities Pvt Ltd access to servers that were technologically latest and least crowded at that particular period. This helped OPG Securities Pvt Ltd. in being mostly the first one to login on the exchange server of the NSE,” the CBI FIR said.
The allegations of unfair access were first made by a whistleblower in January 2015. The whistleblower wrote to Sebi, alleging that a few brokers were able to log into the NSE system with better hardware specifications while engaging in algorithmic trading, to their unfair advantage. Algorithmic trading, or “algo” in market parlance, refers to orders generated at superfast speed by the use of advanced mathematical models that involve the automated execution of a trade.
A technical advisory committee report by the Sebi later found OPG Securities had consistently logged in first on selected TBT (tick-by-tick) servers on most trading days in 2010-2014 and also had access to servers that had better hardware. At this point, Gupta is alleged to have bribed Sebi officials for a favourable order in its enquiry.
Ramkrishna was MD and CEO of NSE from April 2013 to December 2016, while Narain held that post from April 1994 till March 2013.
-Indian Express
