India’s NSE: The bizarre case of Chitra Ramkrishna

It’s a story straight out of a Netflix mini series that is making headlines in India, except that it is really happening. In an absolutely shocking tale of corporate misgovernance and corruption, the regulator — the Securities and Exchange Board of India — or SEBI, alleges that Chitra Ramkrishna, the former Managing Director (MD) and CEO of India’s National Stock Exchange or NSE, was running the institution under the influence of an unknown “yogi” or spiritual guru, for twenty years.

The so called ‘yogi’ knew about the inner workings of the premier stock exchange, went on a vacation with Ramakrishna to the Seychelles to “chill out” and took a great interest in her hairstyle, according to new mind boggling details that have emerged this week.

Ramakrishna headed the NSE from 2013 to 2016. She has not publicly spoken about the scandal since it has emerged. The question on many minds is: was she manipulated and conned or was she part of an elaborate plan to make money?

A probe by SEBI says that Ramakrishna exchanged emails with the so called Yogi for years, who told her what to do with regard to promotions, salaries and much more.

Merely a puppet?

The details of the SEBI probe are bizarre to say the least. The regulator says Ramakrishna “continuously shared internal confidential information about the NSE” with the ‘yogi’ who was actually running the NSE and that Ramakrishna was “merely a puppet in his hands”.

These included financial information and HR issues. One of the key decisions taken by the ‘yogi’ was to get Ramakrishna to appoint another largely unknown figure, Anand Subramanian, as Group Operating Officer and adviser to the MD, with a massive salary hike. He ended up making nine times more than his previous salary, about 4 crores a year, and working only 3 days a week.

In her statement to SEBI on the ‘yogi’, Ramakrishna said, “the Yogi is a Paramahansa who may be largely dwelling in the Himalayan Ranges. I have met him on occasions in holy places. I met him for the first time on the banks of the Ganges nearly 20 years ago directly.

Subsequently, over the years, I have taken his guidance on many personal and professional matters”. She goes on to say “senior leaders often seek informal counsel from coaches, mentors or other seniors in this industry which are all purely informal in nature. In a similar strain, I felt that this guidance would help me perform my role better.”

SEBI alleges that Ramakrishna met the mysterious ‘yogi’ several times, something she confirms in her statements to the regulator as well. Emails sent by the ‘yogi’ in 2015 talk about the Seychelles vacation — “keep bags ready I am planning a travel to Seychelles next month, will try if you can come with me … if you know swimming then we could enjoy a sea bath in Seychelles and rest in the beach. I am asking my tour operator to connect with Kanchan for all of our tickets.” Another 2015 email from the unknown ‘yogi’ to Ramakrishna says “ ... You must learn different ways to platt your hair which will make your looks interesting and appealing!!”

Chitra Ramakrishna’s fall has been as stunning as her rise. When she took over the NSE in 2013 for a period of 5 years she was credited with the exchange’s success, with her leadership coming in for praise from several quarters. The NSE became the largest stock exchange in the country.

But she abruptly quit her post in December 2016 reportedly over differences with some members of the board. Corruption charges against her followed soon after. Among them, the “co-location case” where some brokers were favoured and given access to systems at the NSE which gave them an unfair advantage over other investors.

Corporate misgovernence

In 2019, SEBI ordered the NSE to pay up Rs624.89 crore, which it is believed to have earned from this operation, along with interest calculated at the rate of 12 per cent per annum from several persons — including Ramakrishna. She was also banned from associating with a listed company or a market infrastructure institution for five years.

What this case has shown is utter corporate misgovernence and a board at the NSE which has faced no repercussions. SEBI’s order says the board knew confidential information was being shared with an unknown person, but kept quiet.

There needs to be a proper investigation and accountability for what happened. Why didn’t the board ask questions when Anand Subramanian was appointed as COO, especially since he had no finance background? These are glaring lapses that need a probe. There is also a strong case for better oversight to ensure that too much power is not vested in one person.

As I write this column, the income tax department and now the CBI have got involved in the case. It is hoped they can get to the bottom of this and ensure it never happens again.