The Central Bureau of Investigation (CBI) on Thursday registered an FIR against former Mumbai police commissioner Sanjay Pandey and former National Stock Exchange (NSE) MD and CEO Chitra Ramkrishna, among others, on the orders of the home ministry.
The FIR is linked to the alleged phone tapping of NSE employees conducted during the period when the co-location scam took place at the exchange.
The FIR registered on Thursday is the second FIR in the case. The CBI registered the first FIR in the case in 2018 and arrested Ramkrishna, among others.
“Raids have been conducted at 18 locations across the country, including places connected to the accused. The fresh FIR was registered based on instructions of the MHA,” a CBI official said, refusing to elaborate on Pandey’s alleged role in the case. The official said it was linked to the phone tapping.
Pandey’s questioning was related to the functioning and activities of a company called iSec Securities, a firm amongst a few others that conducted a security audit of NSE around the time the co-location regularities are alleged to have taken place.
This company was incorporated by Pandey in March 2001 and he quit as the director in May 2006. After this, his mother and son took over the charge of the company.
Meanwhile, Ramkrishna is already lodged in the Tihar jail. She was the MD and CEO of the NSE from April 2013 to December 2016. CBI is probing the alleged improper dissemination of information from the computer servers of exchanges to stock brokers.
The NSE co-location scam relates to the manipulation of the exchange by giving select players access to market information ahead of the rest of the market.
Co-location facilities that were rolled out in August 2009 are dedicated spaces in the NSE exchange building, right next to the exchange servers, where generally institutional investors and brokers place their systems or programs.
The CBI is probing the charge that one of the trading members, Delhi-based OPG Securities, was provided unfair access between 2012 and 2014, which enabled it to log in first and get the data before others in the co-location facility.
The broker is believed to have been assisted by certain NSE employees. The scam came to light due to a whistleblower’s complaint to the Securities and Exchange Board of India (SEBI) in 2015, laying out the modus operandi.
CBI on Subramanian Bail
The CBI on Thursday opposed the bail application of former NSE Group Operating Officer (GOO) Anand Subramanian, an accused in the co-location scam, on suspicion that he would influence witnesses and that economic offenses with deep-rooted conspiracies should be dealt with a different approach.
A bench of Justice Sudhir Kumar Jain postponed the matter for Friday, stating that another accused, former NSE CEO Chitra Ramkrishna’s pending bail petition will be taken up the same day.
Subramanian had challenged in Delhi High Court a Special CBI Court’s refusal to grant bail to him. The same is the reason for Ramkrishna to come to Delhi High Court.
Subramanian, who was also a former adviser to former NSE MD Ramkrishna, was the first person to be arrested by the CBI in February this year.
On his interrogation, the CBI also nabbed Ramkrishna. And since then, both are behind the bars, with CBI filing a charge sheet against them on charges of corruption and official misuse of power.