CBI Examining SAT Order In NSE Co-Location Scam Case

The CBI is examining the Securities Appellate Tribunal's order on Monday setting aside the disgorgement directions of the SEBI against former NSE CEO and MD Chitra Ramkrishna and Ravi Narain in the co-location scam case, officials said.

The Securities Appellate Tribunal (SAT) has set aside the SEBI Whole Time Member orders issued on April 30, 2019 directing Narain to disgorge 25 per cent of his salary drawn from financial year 2010-11 to 2012-13 to the Investor Protection and Education Fund (IPEF). 

It directed Ramkrishna to disgorge 25 per cent of the salary for FY 2013-14.

Allowing the appeals of Narain and Ramkrishna, SAT also set aside the WTM direction prohibiting them from associating with any listed company or a market infrastructure institution or any other market intermediary for a period of five years and substituted it with the period undergone by them.

The officials said the approach and ambit of a regulatory body and an investigative agency like the CBI are often different.

When contacted, the CBI did not provide any formal comments.

The SAT order said the co-location technology was carried out under the overall supervision of Narain and Ramkrishna and, therefore, they cannot abdicate their responsibility for the lapse that has been incurred in the monitoring of certain areas.

"We, however, find that there is no finding to the fact that Ravi Narain or Chitra Ramkrishna has made profit or wrongful gain which is a prerequisite for issuance of a direction under Sections 11 and 11B for disgorgement," it said.

The tribunal said in the absence of any finding of wrongful gain being made by Narain and Ramkrishna, it is of the opinion that no direction for disgorgement can be made especially when there is no finding of fraud, unfair trade practice or collusion with any trading members.

The CBI had arrested Ramkrishna on March 6, 2022 in connection with the 2018 FIR in the National Stock Exchange (NSE) co-location scam case.