Former NSE MD steered by a yogi on critical decisions: SEBI

A former head of India’s National stock exchange (NSE) discussed private information with a yogi and sought his advice while making critical choices, a SEBI investigation has found, according to a Reuters report. The report on the probe comes ahead of the bourse’s much-anticipated public listing.

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Chitra Ramkrishna, the former chief executive of the National Stock Exchange (NSE), disclosed information including the bourse’s financial predictions, business goals, and board agenda with a purported spiritual guru in the Himalayas, according to the Securities and Exchange Board of India (SEBI).

“The sharing of financial and business plans of NSE … is a glaring, if not unimaginable, an act that could shake the very foundations of the stock exchange,” SEBI said in an order, imposing penalties on Ramkrishna, the bourse and other top former executives for the lapses.

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For several years, NSE has been beset by allegations of corporate governance failures. The exchange had intended to go public in 2017, but its listing was delayed due to allegations that authorities gave certain high-frequency traders unfair access to co-location servers, which might have sped up algorithmic trading.

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Following a three-year probe, SEBI penalized the exchange for more than $90 million and restricted it from raising funds on the securities markets for six months. NSE challenged the order in court and has sought SEBI’s approval to file for a new IPO, according to Reuters.

During that investigation, however, SEBI discovered records including Ramkrishna’s emails to an unknown individual, whom she said during questioning was a “spiritual force” from whom she had sought guidance for 20 years.

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In her defence, Ramkrishna told SEBI that sharing information with someone who was “spiritual in nature” did not compromise her confidentiality or integrity.

The SEBI ruling, on the other hand, held that Ramkrishna’s contention that sharing sensitive information such as dividend pay-out ratios, business strategies, and performance reviews of NSE personnel did not cause harm was “absurd.”

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The SEBI investigation also discovered that the supposed guru wielded significant influence on the employment of a mid-level executive with no capital market expertise as a direct adviser to Ramkrishna, with inadequate paperwork and a salary higher than most senior NSE executives.

The guru was in charge of the exchange, and Ramkrishna was “merely a puppet in his hands,” as per SEBI.

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SEBI further said that the NSE and its board were aware of the sharing of confidential information but preferred to “keep the matter under wraps.”

The regulator penalized the NSE Rs 2 crore and barred the exchange from introducing any new products for six months, as per Reuters.

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Ramkrishna is fined Rs 3 crore by SEBI and is forbidden from working with any bourse or SEBI-registered intermediary for three years.

Ramkrishna was among a group of executives that started the NSE in the early 1990s as a rival to the more established BSE Ltd, then known as the Bombay Stock Exchange. In 2009, she was hired as NSE’s joint managing director, and in 2013, she was promoted to CEO.