NSE co-location case: Court permits CBI to collect Chitra Ramakrishna's handwriting sample

In a major development in the probe of the National Stock Exchange (NSE) co-location scam, the Central Bureau of Investigation (CBI), on March 28, received permission from a special court in Delhi to collect handwriting samples of former NSE Managing director and Chief Executive Officer Chitra Ramakrishna. The special CBI court headed by Justice Sanjeev Aggarwal, while hearing the case on Monday, also increased Ramakrishna's judicial custody till April 11.

The counsel from the Central agency on Monday informed the court that the aforementioned case is at a very crucial stage as the agency continues its probe on several digital pieces linked to the case. While hearing the bail plea of Chitra Ramkrishna two weeks ago, the special court had sought updates from the CBI.

NSE co-location scam

The CBI is probing the alleged inappropriate dissemination of information from the computer servers of the bourses to the stockbrokers. In the co-location facility offered by National Stock Exchange (NSE), brokers could place their servers within the stock exchange premises providing them faster access to the markets. It has been alleged that some brokers in connivance with insiders manipulated the algorithm and the co-location facility to make windfall gains.

Earlier, capital markets regulator SEBI had penalised the NSE, Chitra Ramkrishna, Ravi Narayan and two other officials for lapses in hiring at the senior level. Ravi Narain was the Managing Director and Chief Executive Officer of the NSE from April 1994 till March 2013, while Ramkrishna was MD and CEO of the NSE from April 2013 to December 2016.

SEBI observed that the NSE and its top administrators violated securities contract norms linked to the appointment of Anand Subramanian as group operating officer and advisor to the managing director. 

CBI arrests GOO of NSE Anand Subramanian

The CBI, after days of questioning, arrested former Group Operating Officer (GOO) of the National Stock Exchange (NSE) Anand Subramanian from Chennai in connection to the 'co-location' NSE case. As per reports, many whistleblower emails were sent to SEBI in 2015 and 2016 regarding alleged abuse of the exchange's co-location facility to make gains by getting early access to the stock market.  After SEBI received complaints on Subramanian's elevation, it initiated a probe into it. CBI has booked the owner and promoter of OPG Securities Sanjay Gupta and others in connection to the co-location case. 

Ramakrishna and Subramanian resigned from the NSE in 2016 and the board let her resign without highlighting her 'grave financial irregularities'. According to Republic's sources, the NSE system was rigged by placing a computer close to the NSE server. This offered the brokers a 10:1 speed advantage over their competitors. The information was disbursed in a sequential manner. This meant that the broker who connected to the server had valuable information before his rivals.

(With inputs from ANI)