The Monk, who ran NSE: Vague yogi episode a tip of iceberg

New Delhi: Technology is a tiger that everyone is riding, India's top stock exchange NSE's then CEO Chitra Ramkrishna had told PTI eight years ago. At the time, she herself was riding the tiger at the helm of the National Stock Exchange (NSE), which had overtaken over 100-year-old Bombay Stock Exchange (BSE) as India's biggest bourse within a year of its launch in 1994.

Ironically, it was a major technical glitch in the NSE's sophisticated algorithm-based superfast trading that had propelled her to the top as its first woman CEO in the male-dominated world of stock trading: On the morning of October 5, 2012, NSE was hit by the so-called 'fat finger trade' which resulted in a trade getting executed in a fraction of a second for a whopping amount of Rs 650 crore and triggering a massive 'flash crash', wiping off nearly Rs10 lakh crore from investors' wealth in the Indian stock market within seconds.

Such was the momentum that a mandatory trading halt could be put in place only after a sudden 16 per cent crash in the benchmark index Nifty -- it missed two check-posts, first at 10 per cent and then at 15 per cent within six seconds. The madness ended after 15 minutes, but still someone had to pay the price. The head that rolled was that of NSE CEO Ravi Narain.

A few months later, Narain's baton was formally handed over to his deputy, Chitra Ramkrishna, on April 13, 2013. Today, the 59-year-old Ramkrishna stands at the centre of an equally bizarre scandal after it was revealed that she was guided by a mysterious 'Himalayan Yogi' in taking key business decisions of the exchange – decisions that impacted the business of an exchange which recorded a daily average turnover of well above Rs2 lakh crore in 2021 and which ranks as the world's largest derivatives exchange and the fourth largest for cash equities in terms of the number of trades. Several people aware of the developments said on condition of anonymity that the time has now come for a deep-cleansing of this marquee institution and directions have come right from the top to all regulatory, enforcement and investigative agencies to get to the bottom of the murky goings-on amid suggestions that malpractices including serious cronyism were covered up by officials, even though it was known to them several years ago.

A former top regulatory official, who had looked into the exchange's affairs at that time very closely, said the top management and some key directors clearly failed to discharge their duties, largely because they trusted people at an institution that serves as a frontline regulator for the Indian capital market, where NSE has a near-monopoly with over 90 per cent market share in some key segments. Virtually every regulatory, administrative and probe agency in the country is on the job and those under the scanner include all directors who served on the NSE board during those years, the top management personnel as also those from the regulatory and government sides, a senior official said.

Fat Finger Trade

♦ Chitra took baton from Ravi Narain on Apr 13, 2013

♦ Prior to that, flash crash on NSE on Oct 5, 2012, wiped out Rs10-lakh cr mcap

♦ Head (Ravi Narain) rolled for the tech glitch

♦ Entire saga has remained buried for almost a decade

♦ There're allegations that the crash was triggered by something else -- perhaps wasn't a technical error, but a deliberate manipulation

♦ Chitra appointed Anand Subramanian as her advisor

♦ Subramanian was promoted as Group Operating Officer at Rs4.21-cr salary

♦ In its final report in Oct 2016, the audit and the bourse dismissed the information exchange, which the regulator had found to be sensitive, as a routine matter by declaring that Subramanian himself was posing as the Yogi to manipulate Chitra