The Securities Appellate Tribunal (SAT) has granted an interim relief to former MD & CEO of the National Stock Exchange (NSE) Chitra Ramkrishna in the Himalyan Yogi case. The tribunal has directed Ramkrishna to deposit Rs 2 crore within six weeks. “If such an amount is deposited, the balance amount shall not be recovered during the pendency of the appeal,” SAT members Tarun Agarwala and Meera Swarup.
On February 11, market regulator Securities and Exchange Board of India (Sebi) had imposed a penalty of Rs 3 crore on Ramkrishna for alleged governance lapses. The market regulator had also directed NSE to forfeit Ramkrishna’s excess leave encashment of Rs 1.54 crore and the deferred bonus of Rs 2.83 crore. Sebi had directed NSE to retain and deposit the same in its investor protection fund.
SAT has directed NSE to deposit Rs. 4.73 crore towards leave encashment and deferred bonus of the Ramkrishna in an escrow account instead of depositing it in the investor protection fund. SAT has also directed Sebi to submit its reply within four weeks.
Ramkrishna’s counsel CS Vaidyanathan contested Sebi’s decision to impose penalty under the Section 23A of the Securities Contracts Regulation Act (SCRA).
He argued that provision came into effect in January 2020 and couldn’t be applied retrospectively. As a result, imposing a penalty under this section was “incorrect and could not be sustained”.
Vaidyanathan also said that the principles of natural justice have been violated as Ramkrishna was not given an opportunity to cross examine the submissions made by certain witnesses before passing of the final order.
“The whole time member proceeded to pass the impugned order without granting an opportunity of hearing which was violative of Article 14 Constitution of India,” he argued.
Vaidyanathan further argued that Sebi had no power to interfere in the autonomy and internal management of NSE.
Ramkrishna in her petition has also said that she had merely sought advice from her spiritual guru. Sebi’s order, she has argued, had nothing to indicate that she was merely following directions of the guru and not applying her mind or reasoning. The petition also argues that Sebi’s order doesn’t mention a single instance where information pertaining to the exchange was misused or has caused loss to any of the stakeholder.
The SAT bench said it will consider all these arguments during the next hearing, which is likely to take place on June 30, 2022.
In a 190-page order issued on February 18, Sebi had penalised NSE, Ramkrishna, and her predecessor Ravi Narain for governance lapses in appointing Anand Subramanian as the exchange’s group operating officer (COO) and advisor to Ramkrishna.
The order also made public email exchanges between Ramkrishna and a purported Himalayan Yogi which showed that the unknown person had significantly influenced the decision making at NSE.