A Delhi court pulled up the Central Bureau of Investigation (CBI) on Wednesday for the slow pace of investigation in the 2018 National Stock Exchange (NSE) manipulation case. It also sent the former group operating officer (GOO) of the NSE, Anand Subramanian, to judicial custody till March 23.
Special Judge Sanjeev Aggarwal said, “What is the magnitude of this case? Rs 1,000 crore? I don’t know. The volume will be big. It is not a small scam. The reputation of the country is at stake. People invest their money in India. They think the NSE is fair. If they come to know that something fishy is going on, who will invest money? You are taking this investigation very lightly.”
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Criticising the slow pace of CBI investigation, the court said, “Will this go on for years? The CBI investigation is open ended, and goes on for years… All our credibility will go. They will all go to China.”
The judge asked if the CBI had taken Subramanian to different locations as part of the investigation when he was under its custody. The agency submitted that the accused was at the CBI office all this while and he was also confronted with former NSE MD Chitra Ramakrishna but “nothing fruitful” came out of those interactions.
The court then remarked, “You did not take him to the scene of crime. You are sitting here in the CBI office, you can relax. What about the role of the SEBI? It is a capital market watchdog. Does it only growl or can it bite also?”
Aggarwal also questioned the role of the resident auditors of the NSE, and said, “One year they can miss. How could they miss for 5-6 years? It is not possible that the brokers who were disadvantaged were not bringing forward their complaints.”
The judge observed that Ramakrishna had come to the CBI office and “was served coffee and later arrested”. “Is there a divine power at play here. Something supernatural?” he asked.
The court also said that the previous MD was questioned and let off and it asked the CBI if it interrogated the I-T heads too, adding that the scam “would not happen without them”.
The judge pulled up the CBI for not mentioning in its application that Ramakrishna and Subramanian were confronted with each other. “You are pulling wool over my eyes. You are treating them very gently…”
The agency told the court that a 30-member team was constituted to investigate the matter.
Advocate Vishnu Mohan, who appeared for Subramanian, told the court that the scam took place between 2010 and 2014, and that the accused became the NSE secretary in 2013 and he was not a technical person.
The court said that the “conspiracy may have ended in 2014, but it was too early a stage to give him a clean chit.”
The 2018 case pertains to charges of preferential access to the trading system to some brokers, through the co-location facility (where brokers can buy ‘rack space’ for their servers) at the NSE, early login and ‘dark fibre’, which can allow a trader split-second faster access to the data feed of the exchange. Notably, even a split-second edge is considered capable of bringing huge gains to a trader.
The CBI had booked Sanjay Gupta, owner and promoter of Delhi-based OPG Securities Pvt Ltd, and others in the case. According to the CBI, Gupta abused the NSE server architecture between 2010 and 2014, in a criminal conspiracy with unknown officials of the NSE and even bribed SEBI officials.
Reputation of country at stake, investors will move to China: Court observes in NSE scam case - The Indian Express
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