In the NSE dark fibre case, SEBI finds NSE, Chitra Ramakrishna, and 16 other individuals guilty of complicity

The 18 entities together received a penalty from the capital market regulator totalling Rs 43.8 crore, with the NSE receiving the largest sanction of Rs 7 crore.

On June 28, the Securities and Exchange Board of India (SEBI) found 18 parties guilty of cooperation in the 2015 dark-fibre case, including former National Stock Exchange CEO Chitra Ramakrishna, NSE COO Anand Subramanian, and the NSE.

The 18 businesses have been penalised a total of Rs 43.8 crore by the capital market regulator, with the NSE receiving an Rs7 crore charge on its own. Ravi Varanasi, the NSE’s chief business development officer, was fined Rs5 crore, and Ramakrishna received an Rs5 crore penalty.

Subramanian, who together with Ramakrishna is the focus of an investigation by the government into alleged wrongdoings committed while they worked at the largest stock exchange in the nation, has been fined Rs5 crore.

According to a complaint received by the market regulator in 2015, certain brokers improperly obtained point-to-point (P2P) dark fibre connectivity from Sampark Infotainment, which was the service provider for NSE’s co-location servers. This led SEBI Chief General Manager Suresh Menon to issue the order.

In accordance with the stock exchange and its workers, brokerages like Way2Wealth and GKN Securities benefited from preferential access to the NSE facility, according to the 180-page order.

The order further found that Sampark Infotainment was only licenced to maintain the network and was ineligible to lay down the dark fibre connectivity.

A black fibre is an optical fibre that has been installed but has not yet been used. It is available for use in fibre-optic communication and is not connected to any active equipment and does not have any other data flowing through it.

The order continued by stating that Ramakrishna, as the MD and CEO of NSE, couldn’t release herself from responsibility for errors, fraud, and omissions involving a co-location facility or other sensitive subject.

Ramakrishna contended that she couldn’t be held accountable because she wasn’t involved in the P2P connectivity network or NSE colocation.

Subramanian was also deemed equally accountable by SEBI, which rejected his claim that, despite serving as the MD’s advisor and the company’s promoter to group operating officer, he was not a senior managerial employee.