Chitra Ramkrishna
Ramkrishna was arrested by the CBI in a separate case and was currently in judicial custody | File Photo

Himalayan blunder: All you need to know about a yogi running the NSE

We summarise how an unknown person ran the show at India’s largest bourse, the damage it caused, and what the regulators are doing about it now

Politicians, businessmen and film stars queueing up to consult astrologers and godmen is par for the routine in India. Now, the regulators are uncovering how the chief of the National Stock Exchange, India’s largest stock market, went several steps further and let a yogi from the Himalayas virtually run the exchange.

Who is Chitra Ramkrishna?

Chitra Ramkrishna is a former Managing Director and Chief Executive Officer of the NSE, a Mumbai-based bourse that handles stocks and derivatives. A certified chartered accountant, she did stints at Industrial Development Bank of India (IDBI) and the Securities and Exchange Board of India (SEBI) before she joined the NSE as one of its founding members. She led the NSE as MD and CEO from April 2013 to December 2016.

Ramkrishna was one of India’s leading women executives, and repeatedly made it to the top ranks in achievers’ lists, including Forbes.

Also read: FM says ‘complete harmony’ with Reserve Bank of India on cryptos

In 2016, she came under the cloud due to a co-location scam. Select players were suspected to receive market price information early on, helping them to front-run the market. The rigging of the NSE’s algo-trading and use of co-location servers was allegedly done with the connivance of insiders. The matter came to light when a whistle-blower complained to SEBI in January 2015.

Ramkrishna stepped down as NSE chief in December 2016, and her exit package included leave encashment of ₹1.54 crore and deferred bonus of ₹2.83 crore.

Why is Ramkrishna in the news again?

An order issued by SEBI following a probe, placed on its website, revealed that Ramkrishna had been guided by a ‘siddha purusha/yogi’, whom she referred to as ‘Shironmani’, for 20 years, in matters personal and professional. When probed, she told SEBI in 2018 that the person was Yogi Paramahansa, who may be ‘largely dwelling in the Himalayan ranges’. The existence of this person, however, is yet to be verified.

Emails between Ramkrishna and the yogi, addressed to, revealed that she had shared extensive information on NSE operations with him, such as its five-year projections, business plans, financial data, and board meeting details. Also, she consulted him on the annual appraisals of employees.

Also read: LIC files for most-awaited IPO, listing slated for March

The 190-page order, submitted by Ananta Barua, SEBI’s whole-time member, revealed that the yogi, who remains officially unknown, was running the exchange de facto while Ramkrishna held the top post.

Among the biggest shockers was the appointment of Anand Subramanian as the NSE’s Chief Operating Officer (COO) and advisor to Ramkrishna. From being a near-nobody earning around ₹15 lakh a year in a private company, Subramanian landed a plum post at the NSE with a cost-to-company (C2C) of around ₹5 crore. The emails between the yogi and Ramkrishna reveal that she held Subramanian in the same light as her spiritual guide, said the SEBI order, leading to conjecture that Subramanian may, in fact, be the faceless ‘yogi’.

Were other NSE executives fully in the dark?

The stock exchange’s board was aware of confidential information being exchanged between the yogi and Ramkrishna, the probe revealed. But “its board had taken a conscious decision to not report the matter to SEBI and keep the matter under wraps”. Ramkrishna’s predecessor Ravi Narain was allegedly fully aware of the happenings, but he let things be, too.

Despite the obvious governance lapses and misconduct, the NSE board allowed Ramkrishna to resign citing ‘personal reasons’ in 2016, rather than dismissing her, which gave her a lot of benefits.

Ramkrishna told SEBI that she did consult the NSE board about various things, but when it came to taking the final call, she sought guidance from the yogi. She justified it saying: “As we know, senior leaders often seek informal counsel from coaches, mentors or other seniors in this industry which are all purely informal in nature.”

Once Ramkrishna quit, the NSE disposed of the laptops belonging to her and Subramanian as ‘e-waste’, thereby destroying substantial evidence.

What action has SEBI taken?

SEBI has slapped penalties on the NSE, Ramkrishna, and others. While Ramkrishna has been told to pay ₹3 crore, the NSE, Narain and Subramanian have to pay ₹2 crore each within 45 days. VR Narasimhan, who was then the Chief Regulatory Officer and Chief Compliance Officer, has been directed to pay ₹6 lakh. The NSE has been barred from launching any new product for six months.

Ramkrishna will also forfeit the leave encashment and deferred bonus that she received from the NSE. Further, she and Subramanian have been restrained from associating themselves with any markets-related institution or SEBI-registered intermediary in any capacity for three years. Narain faces a similar order effective for two years.

The yogi remains untraced. Sleuths have not been able to track the IP address from the emails, either.

What has been the political reaction?

While there has been awe, disbelief and horror among the public, the NSE revelations have evoked very little political reaction. Ramkrishna was appointed as NSE chief during the UPA period, but the misconduct occurred across both UPA and NDA regimes. Therefore, maybe, the parties are being cautious about it.

Spicy story indeed, but how does this affect the common man?

The NSE is India’s biggest stock exchange, owned by some leading financial institutions, banks, and insurance companies. Its total market capitalisation is estimated at over $3.4 trillion. The Nifty50, Its flagship index, is seen as a barometer of the nation’s business scenario.

Also read: Small investors dive into equity markets even as institutions dither

A lapse of governance of this scale will impact investor confidence and have ramifications for the entire capital market.

Also, crores of Indians have invested in NSE stocks, either directly or via mutual funds. Hence, the misconduct by the top management could well have eroded the net worth of their holdings, though the details are yet to be arrived at.

Read More
Next Story