Chitra Ramkrishna gets relief from SAT, accepts petition against SEBI’s order, but will have to deposit Rs 2 crore

SAT said, if the amount of Rs 2 crore is deposited, then the remaining amount of penalty will not be recovered during the hearing of the petition

Chitra Ramkrishna: Former MD and CEO of National Stock Exchange (NSE) Chitra Ramakrishna has got interim relief from the Securities Appellate Tribunal (SAT). SAT has accepted Ramakrishna’s plea for hearing in the “Yogi of Himalaya” case. Also directed the former CEO of NSE to deposit Rs 2 crore within six weeks. According to a Business Standard report, SAT members Tarun Agarwal and Meera Swarup said, “If this amount is deposited then the balance amount will not be recovered during the hearing of the petition.”

SEBI did this action

On February 11, SEBI had imposed a fine of Rs 3 crore on Ramakrishna on charges of lapses related to the functioning of the NSE. Besides this, SEBI had also directed NSE to forfeit Rs 1.54 crore and Rs 2.83 crore of deferred bonus paid in lieu of additional leave to Ramakrishna. This amount was directed to be kept in the Investor Protection Fund.

However, SAT has directed to deposit this amount of Rs 4.73 crore in an escrow account instead of Investor Protection Fund. SAT has directed SEBI to file its reply in the matter within four weeks.

Yogi saga of NSE: Unique story of misuse, misappropriation and superstition of position

Ramakrishna’s lawyer raised questions on SEBI’s action

Ramakrishna’s lawyer CS Vaidyanathan opposed Sebi’s decision to levy penalty under Section 23A of the Securities Contracts Regulation Act (SCRA).

He argued that this provision came into effect in January, 2020, which cannot be retrospective. Consequently, the imposition of penalty under this section is “wrong and cannot be enforced.”

Violation of “natural justice” in Ramakrishna’s case

Vaidyanathan also said that the principles of natural justice were violated by denying Ramakrishna the right to cross-examine the arguments of some witnesses before passing the final order. The counsel also said that SEBI has no right to interfere in the autonomy and internal management of NSE.

Next hearing will be on June 30

Ramakrishna said in his petition that he only sought advice from his spiritual master. Nowhere is there any indication, she argued, that she was following the Guru’s instructions and not using her mind or logic.

The SAT bench said it would consider all these arguments in the next hearing to be held on June 30, 2022.