The Securities Appellate Tribunal (SAT) gave some relief to the National Stock Exchange (NSE) in the co-location case as it set aside a ruling by the Securities and Exchange Board of India (SEBI). However, the tribunal directed the country’s largest exchange to pay a penalty of Rs 100 crore for the lapses in its systems.
The tribunal has dismissed the disgorgement order of Rs 625 crore in the NSE co-location case.
SEBI had in 2019 passed a series of orders against the NSE and its former chief executives, Chitra Ramkrishna and Ravi Narain. The capital markets regulator had claimed that the bourse did not exercise due diligence when putting in place a network that allowed high-frequency traders unfair access to some network servers at the exchange.
The NSE was ordered to pay Rs 687 crore in disgorgement along with interest and its former MD & CEO Ramkrishna, Narain and a few other officials were asked to disgorge 25 per cent of the remuneration they received from FY11 to FY13.
The SAT on Monday said that the directions to disgorge 25 per cent of salary from Ravi Narain and Chitra Ramakrishnan is set aside. “The direction prohibiting Chitra Ramakrishna from associating with any listed company or market infrastructure institution, or any other market intermediary for five years is also set aside and substituted for a period undergone by them,” the order read.
It added that the stock exchange did not make any illicit gains in the co-location case.
The SAT on Monday ruled that SEBI failed to establish illegal gains, while setting aside disgorgement of over Rs 10 billion against Ramkrishna and Narain. The former NSE CEO was arrested by the CBI in March 2022 in connection with its ongoing probe in the NSE co-location scam.
Ramkrishna had “introduced a non-existing person to mislead the investigative agency which may also prima facie show her connivance in the matter”, the court had noted in its ruling.
NSE co-location scam
Last year in February, the capital markets regulator had alleged abuse of power by the then top brass of the NSE. The SEBI report claimed that Ramkrishna, who was appointed the MD and CEO of the exchange on April 1, 2013, sought guidance from a spiritual guru dwelling in Himalayan ranges on personal and professional matters for 20 years.
