The income tax department raided former National Stock Exchange (NSE) chief executive officer (CEO) Chitra Ramkrishna on Thursday.

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The search comes days after Ramkrishna was penalised by the Securities and Exchange Board of India on February 11.

The market regulator imposed a penalty of Rs 3 crore on her for sharing internal confidential information of the exchange with an unknown person, besides irregularities in the appointment of a senior official Anand Subramanian, for which NSE and the senior management, too, were responsible.

Ramkrishna said she was being guided by a 'yogi' living in the Himalayas on decisions relating to Subramanian's compensation.

According to the SEBI order, Ramkrishna, who quit in December 2016, shared information like organisational structure, dividend scenario, financial results, human resource policies and related issues, response to regulator, etc. with the unknown person by addressing her correspondence to an email id [email protected] between 2014 and 2016.

Subramanian was Chief Strategic Advisor of NSE from April 1, 2013, and was re-designated as Group Operating Officer and advisor to MD and CEO from April 01, 2015, till October 21, 2016.

According to the market regulator's order, Ramkrishna brought Subramanian into NSE as Chief Strategic Advisor but in a consultant's role working four days a week. He formerly worked as a mid-level manager in Balmer and Lawrie and had no previous exposure to capital markets. His salary at Balmer and Lawrie was Rs 15 lakh per annum and at NSE, it was raised to Rs 1.68 crore.

The Human Resources department was not consulted before Subramaniam's appointment, according to SEBI. Neither was the position of Chief Strategic Advisor advertised, nor was any other person considered for the role. Only Ramkrishna interviewed him, the market regulator said.

Over the years, Subramanian was given arbitrary and disproportionate increases in compensation. By FY17, he drew an annual package of Rs 4.21 crore while he was still a consultant. His remuneration was higher than most senior executives in the exchange.

According to SEBI, the NSE and the board consciously decided to not report the matter to the regulator and keep it under wraps.

A forensic audit by consultancy firm E&Y claimed Subramanian himself was the yogi behind [email protected] who was directing Ramkrishna to take the aforesaid actions.

First Published:Feb 17, 2022 11:37 AM IST