Shock market

A stock exchange set up to make share trading transparent is now tangled in controversies

- NACHIKET KELKAR

It was a chance discovery. In 2015, India’s market regulator, the Securities and Exchange Board of India, started an investigation into a whistleblower’s complaint about a few traders being given preferential access to the National Stock Exchange’s servers and co-location facilities. This access had given them a huge advantage over other brokers and traders in the time-sensitive trading. During this investigation, however, SEBI stumbled upon a far bigger conspiracy in the country’s largest stock exchange.

Chitra Ramkrishna, managing director and chief executive of the NSE between 2013 and 2016, apparently, had been sharing confidential information to a mysterious Himalayan yogi and seeking advice from him for making professional decisions. She appointed Anand Subramanian, an executive who had little relevant experience, as her adviser. While all these happened, the NSE board and public interest directors look away.

The NSE was incorporated in 1992 and commenced its operations in 1994, as a response to the Harshad Mehta scam at the Bombay Stock Exchange in 1992. Mehta, a share broker, manipulated the prices of several stocks by illegally obtaining money using fake bank receipts. Eventually markets crashed and investors lost crores of rupees. That was a time when stocks were bought and sold on a trading floor where brokers gathered and traded using hand signals and by shouting across the room.