NSE Mismanagement: Chitra’s Weird Himalayan Yogi and SEBI’s Weak Order, Push India’s Image Back to Snake Charmers and Holy Men
India has become a laughing stock, as the global media laps up reports of how a ‘Himalayan Yogi’ was the puppet master dictating the actions of Chitra Ramkrishna, celebrated managing director (MD) and chief executive officer (CEO) of the National Stock Exchange (NSE) who resigned abruptly in December 2016.
 
And why not? The story, more bizarre than any fiction, has been exposed in cringe-worthy detail by SEBI’s 190-page order released last Friday. In line with the now popular narrative, it shows we have two Indias. One India—in which the NSE is a tech powerhouse, the largest derivatives exchange in the world with an incredible 70% operating margin and near monopoly position over India’s capital market. And another India—where the same NSE has an MD who claims to communicate on email with a spiritual guru who instructs her on how to manage the Exchange—in effect the Indian rope-trick combined with modern technology and an email ID to communicate with her, but ostensibly no physical presence!
 
SEBI’s order quotes her absurd claim that she met this ‘unknown’ guru on the banks of the Ganges 20 years ago, as well as emails where she is making plans to ‘chill’ with him at Seychelles and rendezvous in Delhi.
 
 
Then there is the third India, where the market regulator does the following: sleep for a decade on published evidence of irregular appointments (including Chitra’s own appointment as MD); asks the NSE to repeatedly investigate itself during the algo scam; bleats plaintively about NSE’s refusal to answer its queries. All this, brought out in SEBI’s order, exposes the investigation as a farce by failing in the rudimentary requirement of establishing the identity of this ‘guru or siddha purush’. After all, he was running the Exchange by proxy and was, probably, Anand Subramanian (Subbu), a consultant she hired in violation of all norms and repeatedly promoted on the advice of this ‘guru’. SEBI’s order spews out plenty of details, but is riddled with inconsistencies, poor logic and, eventually, lets off the NSE and its senior employees with a small rap. SEBI’s kid-glove treatment of an unruly and aggressive NSE clearly continues even after a regime change at the NSE as well as at SEBI. 
 
What is worse, between the co-location (Colo) or algo scam of 2015 and the situation today, SEBI has issued multiple orders that fail to correct basic flaws in the functioning of the NSE. The MD & CEO, even today, has no experience in technology, regulator or capital markets. The board continues to delegate enormous powers to the NSE management and there is nothing to prevent another puppeteer dictating its actions. The Exchange reportedly continues to bypass the regulator and hobnob with the finance ministry on issues of listing and SEBI’s order, despite identifying all these issues, does not order corrective actions.
 
Remember, the NSE is not just another company. It is a first-line regulator and a highly sensitive market infrastructure institution (MII). Shouldn’t the government be concerned about how this damages India’s reputation and ensure a full clean-up? Let us analyse why the order paints a scary picture.
 
Known ‘Unknown’: A forensic audit by Ernst & Young (E&Y) on the Colo scam had revealed, way back in 2015, that Chitra was sharing internal confidential information about NSE’s organisational structure, financial results and policies and seeking guidance on internal issues with an outsider whose email ID was [email protected] (it combined the names of the three vedas). 
 
A subsequent inquiry, ordered by SEBI, revealed that she also referred to this ‘unknown person’ as ‘thee’ or ‘swami ji’ or ‘your lordship’ and said the “Company (NSE) is run on your blessings alone” (para 71.2 of SEBI’s order). This yogi has such granular information about NSE employees that he advises her on their promotions, postings, appointment of board directors, how to avoid reporting Subbu as a KMP (key management person) to SEBI and, finally, how to lobby the finance ministry and government to ensure ‘self-listing’ by the NSE. An email from the so-called guru that exposes how Chitra acted as a mere puppet says, “Don't worry the straw knows when to be a capillary and when NOT to. Kanchan is the straw and I will be the suction force for this and you will vomit all that is required as always.” Kanchan, referred to in the in the email is Subbu and the issue under discussion is how to lobby the government to permit self-listing by the NSE.
 
Most emails from this guru’s ID ([email protected]) are copied to Anand Subramanian (Subbu) whose career was closely tracked by the ‘guru’ by copying him in correspondence with Chitra. And, yet, SEBI alone is unable to come to any final conclusion as to his identity, but still does not recommend further investigation to establish it. Instead, SEBI attempts to bury matters with paltry penalties and a meaningless order barring six entities from the capital market. 
 
Everybody I spoke to from SEBI and NSE insiders as well as some board members are absolutely certain that the fake guru is Subbu. His attachment and equation with Chitra was the subject of much gossip at the NSE. Many emails between Chitra and her guru are detailed discussions about Subbu’s rapid promotions and astronomical salary hikes, how to avoid reporting him as KMP. The guru also ingeniously recommends rewarding all those who could, and ought to have, object to the irregular decisions, but were effectively silenced with personal rewards.
 
The SEBI order finds convoluted ways to avoid identifying Subbu as the ‘guru’, even though the forensic auditor, E&Y had no such doubts. Based on tracing the IP address, etc, it had concluded that [email protected] was none other than Subbu. Anant Barua, SEBI’s whole-time member (WTM), who wrote the wishy-washy order, thinks this is not conclusive enough. He systematically weakens E&Y’s findings by citing two emails from the same ID, that he thinks cast doubts on whether rigyajursama was, indeed, Subbu.
 
One, dated 17 February 2015, talks about a romantic trip to Seychelles cited below for her to ‘chill out’ and is replete with un-guru like comments such as “Today you are look awesome” and “you must learn different ways to platt your hair which will make your looks appealing and interesting.”
 
 
The second email from [email protected] to Chitra is copied to her secretary Navaz Patel as well. This time, he poses as a ‘friend’ of the ‘foreign shareholders representation committee’ seeking a meeting at the ‘India office’ at Vasant Vihar in Delhi. Navaz has confirmed the appointment. SEBI had a duty to initiate these actions.
 
1. Hand over the investigation to cybercrime experts to conclusively identify the guru with very physical needs, aspirations and greed.
 
2. Question Chitra’s secretaries (Navaz and Lourdes) about the meeting in Delhi, the trip to Seychelles and if they had any connection with ‘Seshu’ who was to make the bookings for the ‘guru’.
 
3. Question NSE’s foreign investors, including shareholder directors on the board, about the existence of a foreign shareholders’ representation committee and if anyone had been authorised to speak on their behalf.
 
4. Investigate the financial dealings with the ‘guru’, hinted at in an email to Chitra copied to Subbu to “withdraw and surrender to the unknown person per month as gratitude on the gross amount.” Why has SEBI not been investigated, if this is backed by any financial transactions and if so with whom?
 
5. All of this would have been revealed if the last two emails were either sloppiness on the part of the guru and his devotee or a deliberate attempt to muddy the waters.
 
SEBI’s failure to conclusively identify the ‘guru/ unknown person’ ensures that nobody is seriously indicted. It then goes on to indict the NSE board for letting off Chitra and Subbu by allowing them to resign and not sacking them. Interestingly, even under the new MD-CEO, Vikram Limaye, the NSE has aggressively defended the actions of the directors, then and now. Also, both NSE and Ravi Narain (indicted former vice-chairman and a member of the founding team of the Exchange), seem to believe that once a person has resigned (Subbu as well as Chitra, in October and December 2016, respectively), no further action is possible. If this is accepted at face value, it would mean that anyone can get away with fraud at the monopoly exchange with no consequences other than resignation. And why won’t the same latitude be given to companies and market intermediaries?
 
The NSE board members, who I spoke to, aggressively defend their decision to allow Chitra and Subbu to resign, despite knowing the enormity of wrongdoing, fudging regulatory filings, etc, on the pretext of avoiding litigation. This is amusing since NSE itself had no issues in filing litigation to contest every SEBI order. These sources strongly refute the claim that SEBI was not informed of NSE’s actions and decisions. They claim to have met the SEBI chairman Ajay Tyagi and given him a copy of their report. This is a serious charge and contradicts SEBI’s findings. It also raises a question about why the chairman did not counsel the board and ask it to act more decisively. Isn’t it the job of the regulator to provide this guidance to public interest directors, who were specifically appointed by SEBI? According to my source, former SEBI chairman UK Sinha had specifically appointed them to clean up the Exchange. If this is true, who will hold SEBI responsible? Will these directors speak up? One of them told me they are discussing the matter and taking legal opinion.
 
On the flip side, if they remain silent and SEBI sticks to its make-believe indictment, then it raises questions about their acting as independent directors on other listed entities and proxy advisory firms. After all, if they have fallen short of meeting their own fiduciary obligations when appointed as public interest directors in a first-line regulator with the monopoly presence that the NSE has, how does the regulator expect them to act independently on other boards? The ball is in SEBI’s court. If its charge has substance, it should have consequences; otherwise, the regulator is no different from a troll who uses its power and presence to cast aspersions on others, to deflect attention from its own failures.
 
Dogs That Did Not Bark
SEBI’s order then goes on to dwell on what Sherlock Holmes would have called the dogs that did not bark. Each person indicted by SEBI (named in the table below) benefited from their silence over Subbu’s pay hikes and colluding with Chitra to avoid reporting him as a KMP. VR Narasimhan, NSE’s chief regulatory officer, was even appointed dean at the National Institute of Securities Management (NISM) a certification and training institute set up by SEBI. I was told, “SEBI doesn’t interfere in the day to day administration of NISM. Mr Narasimhan’s tenure is till April 2022 claims that NISM makes independent decisions.” Not even a nudge to the NISM board to ask him to go, after being issued a show-cause notice in 2019. SEBI’s reply is also disingenuous because there is a public record from past controversies of how it decides senior appointments at NISM.
 
J Ravichandran, one of the earliest employees got multiple pay hikes and designation changes. Ravi Narain got to stay on NSE’s board in a specially created post, with a lot of power, little accountability, many board directorships and perks.
 
 
Regulatory Failure
The rot at the SEBI as well as the NSE has grown over the past two decades and has been captured in our book Absolute Power: Inside Story of the National Stock Exchange’s Amazing Success, Leading to Hubris, Regulatory Capture and Algo Scam released in June 2021, which describes the complete regulatory capture and dominance of the NSE.
 
Read the full SEBI order here
 
Read our coverage on the NSE algo scam here.
 
 
 
Comments
jayaramm51
4 months ago
Um. Believe that snakes function (charming) from starvation and movement, after being de-fanged and that there are 496 / (552) hol(e)y people in one section of the parliament. We are tv(a) blessed !
uttam.dubey
4 months ago
@monelylife team and Sucheta Madam, should review the contents reaching to UPSC aspirants , so that the next generation youths ask the right questions and understand the modern days corruption.

https://www.youtube.com/watch?v=_H8cKlCMH9o


rameshjrdhr5
4 months ago
I wonder, whether Modi govt is still sleeping?
Sudhir Mankodi
4 months ago
The lady rather than quizzed by ED, should be quizzed by a psychiatrist! Some \"chemical locha\" - to quote from a Bollywood movie! Irony that such a person was selected at the helm and nobody raised any voice against her while she was enjoying political patronage. Speaks volumes about governance standards in NSE and SEBI too. Spineless boards.
sundarbtw
Replied to Sudhir Mankodi comment 4 months ago
She started her career in NSE in 1985.. All along she was a star performer.
nairuti.pathak
4 months ago
This scam may be considered extremely serious one. In the ear of Cyber Security, tracing of email id is
"Bachho ka khel". The way Harshad Mehta scam exposed and concerned authority compelled to take stern action against him, this is another case requires detailed and genuine investigation.
nairuti.pathak
Replied to nairuti.pathak comment 4 months ago
Pl read as "era of Cyber Security.." and one more point, the word Himalayan Guru used by the lady seems so of lower thought. How one can use so casually " supreme spiritual power house of India". Its really hurting.
sundarbtw
4 months ago
In all likely hood invisible yogi is nothing but Ms Chitra herself.. Delusional behavior with normal functions is not so very rare. I have seen a case similar to that. They will have absolutely normal function. SEBI and others would have found out this. But how on earth they can tell world CEO of Number one exchange is like that
surajit.som
Replied to sundarbtw comment 4 months ago
Yogini , delusional behavior ? Hmmmm . What about the " earthly " pleasures she was enjoying including vacations at Seychelles with a companion ....? Crores of rupees salary to favourite persons bypassing all rules ? Over 40 crores after her " retirement " after all this . If all these benefits are given, there would be crores of people would be escstatic to be an "Yogini, delusional " .
!!!!!!!!
gajendrankaruthiah
4 months ago
it is a shame for this country to allow all these culprits to leave free.
pmbhate
4 months ago
It is high time that investors click the BSE button instead of the NSE button while trading online. Will they do it? No. Will investors boycott the NSE IPO if and when it comes? Certainly not. Will the powers that be clean up the mess in NSE? No. This is the reality. Should we then pack our bags and go to the Himalayas? Sounds tempting, especially now! No. All we can do is to support people who are trying to light a little lamp in the eternal amavasya that has enveloped the financial and moral space in the country.
sinha.satiprasad
4 months ago
Somebody presented the credentials of being a devout Yogi guided proper Hindu in keeping with the ecosystem. Capitalism afterall is a massive con game. Cleverest takes it all.
surajit.som
Replied to sinha.satiprasad comment 4 months ago
Well, how many want to immigrate to Cuba , North Korea ? But to America, Canada ,... ,...many !!!!
sinha.satiprasad
Replied to surajit.som comment 4 months ago
Yeah. Till the going is good. Some gets frozen to death chasing el Dorado
sinha.satiprasad
Replied to sinha.satiprasad comment 4 months ago
If you are not a vested interest yourself you will notice all that glitters of the malls are ultimately gets financed by innocent taxpayers. Bankrupt banks gets recapitalised by governments., whether in India or US of A.
surajit.som
Replied to sinha.satiprasad comment 4 months ago
Capitalism at least creates jobs like in Europe, America,....Communism creates army of unemployed people . Look at WB, Kerala,....
sinha.satiprasad
Replied to surajit.som comment 4 months ago
WB, Kerala are part of india . It was not an advocacy of communism.
sinha.satiprasad
Replied to sinha.satiprasad comment 4 months ago
After all communism is a theoretical concept never implemented anywhere till now.
surajit.som
4 months ago
Anyway this " invisible " Guru is very much visible. Not in India or Sechelles but in London as a guest of Vijay Mallya !!!!!
surajit.som
4 months ago
Quite honestly, this " Himalayan " " Invisible " Guru must be a extraordunarily virile !!!!!
raaajan03
4 months ago
It is absolutely pathetic to see the Finance ministry maintaining a dead silence over the massive loot which took place at NSE. Considering that SEBI is not going to take any action or is being prevented from taking any action it is for the ministry to initiate a complete investigation. Also considering the scale of fraud and all the systems and protocols were repeatedly broken and the entire Board of NSE was also complicit wonder why Supreme Court suo moto cannot order a CBI investigation.
anilgirotra25
5 months ago
Fit case to go to cbi . Unless there was nexus between regulators and the exchange this could not have happened. What were so called independent directors doing? Probably they sang the tune of the MD of exchange. Even other officials of NSE were so scared that none alerted the regulators. In all public institutions of this type ( NSE is not like other privately promoted coys) there should be some watchdogs - CVO like authority.
ramaninv1953
5 months ago
Investigate thoroughly the whole episode by CBI/ED/SFO and bring the wrong doers to justice.Officials of SEBI (Past and Present) & MOF also to be investigated and Exemplary punishment should be awarded.
Shreyas Kholgade
5 months ago
We can find such hard hitting and lies exposing articles only in Moneylife and such useless and shameless govt regulators with Absolute Power only in India .
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