SEBI imposes Rs.7 cr penalty on NSE & Rs.5 cr on Chitra Ramakrishna in ‘dark fibre’ case

In conjunction with the NSE co-location case, the Securities and Exchange Board of India levied fines against the National Stock Exchange (NSE), Chitra Ramakrishna, Anand Subramanian, and others. NSE received a fine of Rs 7 crore from SEBI, along with fines of Rs 5 crore each for Chitra Ramakrishna, Anand Subramanian, and Ravi Varanasi.

The board also fined Nagendra Kumar SRVS, Deviprasad Singh, and MR Shashibhushan Rs 1 crore each, Prashanth D’souza, Om Prakash Gupta, Sonali Gupta, and Rahul Gupta Rs 1.10 crore, Sampark Infotainment Pvt. Ltd Rs 3 crore, GKN Securities Rs 5 crore, and Way2Wealth Brokers Private Ltd Rs 6 crore. Netaji Patil, Rima Srivastava, Parshant Mittal, and Mohit Mutreja each received a fine of Rs. 10 lakh.

In the dispute, it is claimed that certain brokerage firms and members at NSE were given preferential access to connect across the colocation facilities before other members through the use of “black fibre.”

Dark fibre, also known as unlit fibre, is an optical fibre that has been installed but has not yet been used. It is accessible for use in fiber-optic communication systems but does not currently have any data flowing through it.

The NSE co-location case, also known as the NSE manipulation case, was the subject of a FIR filed by the Central Bureau of Investigation (CBI) in 2018. But the agency didn’t begin looking into the former CEO Chitra Ramkrishna’s and other officials’ participation until this year.

Within 45 days of receiving the order, SEBI has instructed the notices to pay the full amount of the penalty either demand draught or online.

The SEBI order stated that it had been “now established that W2W and GKN, in collusion with the employees of NSE and Sampark, made significant profit due to the unfair latency advantage available with them,” taking into account the factors listed in Sections 15J of the SEBI Act and Section 23 J of the SCRA.

Ramkrishna is accused of disclosing private information about the transaction to a “yogi who lives in the Himalayas.” The alleged unfair practises allegedly took place between 2010 and 2015, according to a statement from the CBI.

In a previous SEBI order, it was stated that the agency discovered documentary evidence that Ramkrishna had sent emails to a “unknown person” in the years between 2014 and 2016 containing internal NSE data, such as the organization’s structure, dividend scenario, financial results, human resources policy, and related issues.

Anand Subramanian, a former NSE COO, and Ramkrishna were both detained by the CBI in connection with the matter in February and March, respectively. The arrest followed a SEBI probe that suggested that Ramkrishna had broken multiple rules in Subramanian’s appointment and the sharing of sensitive information.