India’s National Stock Exchange (NSE) is in trouble, thanks to a yogi who, it later turned out, may have been an employee of the institution—and the beneficiary of most of his own advice.
It is now revealed that a former chief executive officer (CEO) of the country’s largest stock exchange was taking advice, even on professional matters, from this mysterious Hindu monk or spiritual practitioner, believed to be dwelling in the Himalayas.
On Friday (Feb. 11), market regulator Securities and Exchange Board of India (Sebi) penalised the NSE and its former managing directors and CEOs, Chitra Ramkrishna and Ravi Narain, along with others, for violation of the securities contract rules. This was in connection with a case related to the appointment of Anand Subramanian as group operating officer and advisor to the managing director.
In a bizarre turn of events, a Sebi probe concluded that Ramkrishna, who was the managing director and CEO of NSE from April 2013 to December 2016, was guided by a yogi referred to as “Sironmani” (the exalted one).
Ramkrishna gave a “frequent, arbitrary, and disproportionate” increase in compensation to Subramanian without any evidence of performance evaluation. She also shared certain confidential information, including financial and business plans of NSE, dividend scenario, financial results, with the yogi and even consulted him over the performance appraisals of the exchange’s employees.
Sebi found that Ramkrishna was in contact with the yogi through the email ID email@example.com. Interestingly, a forensic audit by E&Y concluded that it was none other than Subramanian himself who was using the mail address.
“…he is a spiritual force who has been guiding her for the past 20 years and that, as a spiritual force, their spiritual powers do not require them to have any such physical coordinates and would manifest at will,” the 190-page order stated about the mysterious yogi’s claims.
The Sebi order came down heavily on the NSE board that was aware that Ramkrishna was passing on confidential information to an unknown third party—an instance of gross misconduct—but did not take any action. Against this backdrop, Ramakrishna was named Forbes’ Woman Leader of the year in 2013 for her work as CEO of the NSE.
Sebi has now levied a fine of 3 crore rupees ($397,936) on Ramkrishna, Rs2 crore each on NSE, Subramanian, and Narain, and Rs6 lakh on VR Narasimhan, who was the chief regulatory officer and compliance officer then.
Further, Ramkrishna and Subramanian have been restrained from associating with any market infrastructure institution or any intermediary registered with Sebi for a period of three years; for Narain, this time period is two years.
Sebi has directed NSE to forfeit the excess leave encashment of Rs1.54 crore and the deferred bonus of Rs2.83 crore, of Ramkrishna, which was retained by the exchange. The cumulative amount must be deposited with Sebi’s Investor Protection Fund Trust within six days. In addition, the watchdog has barred NSE from launching any new product for six months.