CBI expands NSE case probe, raids brokers across states

NEW DELHI: The Central Bureau of Investigation (CBI) on Saturday raided about a dozen brokers in multiple cities as it expanded its probe into the alleged misuse of co-location of the National Stock Exchange, involving its former chief executive officer Chitra Ramkrishna.

Without naming them, a senior official familiar with the investigation, said these brokers were raided in Mumbai, Delhi, Gandhinagar, Noida, Gurugram and Kolkata among other cities for allegedly “misusing the architecture of co-location” — a facility offered by the NSE where brokers could place their servers within the stock exchange premises giving them faster access to the markets.

OPG Securities Pvt Ltd, a Delhi-based firm, and its owner Sanjay Gupta have already been charged by CBI and the Enforcement Directorate (ED) for allegedly abusing the co-location facility to make windfall profits.

CBI, which is investigating the irregularities since 2018, informed a special court last week that it was looking into the misuse of co-location facility by other brokers as well, besides the role of marker regulator — Securities and Board Exchange of India (Sebi) — and other NSE officials.

“Saturday’s raids are part of the expanded probe only. More NSE officials and stock brokers will be questioned in coming days,” said the official cited above, requesting anonymity.

It is suspected that like OPG Securities, other brokers also had access to the server architecture (tick-by-tick) of the NSE between 2010 and 2014, enabling them to log-in first to the server and get the data split-second faster, getting “an unfair advantage”, said a second official, who also wished not to be named.

Besides, the brokers were allegedly permitted to connect to the backup servers with very less load, and therefore, they were given far better access to the market feed, he added.

In a charge sheet filed against Ramkrishna and NSE’s former group operating officer (GOO) Anand Subramanian last month, CBI claimed that she was communicating with an external e-mail ID rigyajursama@outlook.com, suspected to be the mysterious ‘Himalayan Yogi’, through her e-mail IDs, to seek advice and guidance on official matters of NSE.

Ramkrishna is also accused of appointing Subramanian at a high salary, despite him not having proper qualification and without following due procedure. CBI arrested Subramanian and Ramkrishna on February 25 and March 6, respectively.

Ramkrishna was appointed as joint managing director of the NSE in 2009 and continued on the post till March 2013, with the power of MD, according to CBI. Thereafter, she took over as MD and CEO on April 1, 2013 and remained there till 2016. It was during this period that co-location was started by the NSE.

CBI probe has revealed that between 2010 and 2015, when Ramkrishna was managing the affairs of NSE, OPG Securities had connected to the secondary POP server of NSE on 670 trading days in the Futures & Options segment.

Her legal team didn’t respond to HT’s request for a comment.

FILE PHOTO Brokers were raided in Mumbai, Delhi, Gandhinagar, Gurugram, Noida and Kolkata among other cities.