Income tax authorities on Thursday raided the residences of Chitra Ramakrishna, former managing director and chief executive officer of the National Stock Exchange, and Anand Subramanian, former group operating officer. The raids come a day after top NSE officials, including the current managing director Vikram Limaye, met senior financial officials following the Securities and Exchange Board of India’s (Sebi’s) February 11 order.

Sources familiar with the developments in New Delhi said the raids will continue on Friday.

The Sebi order had stated that the duo had committed “financial misdeeds” and there were serious governance lapses between 2013 and 2017. FE has learnt that the tax authorities are looking at tax evasion and several other angles that pertain to payments made “as gratitude” money to an unknown person on the gross amount paid to Subramanian.

After finding serious lapses in governance and misrepresentation of facts, Sebi imposed a penalty of Rs 3 crore on Chitra Ramakrishna and Rs 2 crore each on the National Stock Exchange, former MD and CEO Ravi Narain, and Anand Subramanian. The most damning observation is that Ramakrishna shared sensitive information pertaining to financials, appraisals, increments and strategy with an unknown person, who is also referred to as the “Siddha Purush” by Ramakrishna.

In its order, Sebi says, “Hence, there appears to be a glaring conspiracy of a money making scheme that involves Noticee No. 1 (Ramakrishna) and No. 6 (Subramanian) with the unknown person, by which Noticee No. 1 would increase the compensation granted to Noticee No. 6 and Noticee No. 6 would then pay the unknown person from such increased compensation.”

Sources said the government is looking at all possible angles, which could at a later date include money laundering too. Sebi’s order has raised more questions about the “unknown person” who has played a key role in the decision-making by Ramakrishna.

There have been several allegations regarding governance violations at the country’s largest stock exchange between 2013 and 2017 with reference to the appointment and compensation of Subramanian, who did not have the qualification required for the position he held. Sebi concluded that there were financial misdeeds by the former CEO as she could neither justify the appointment of Subramanian nor the substantial increases in his remuneration.

In a late evening statement on Wednesday night, NSE said over the last few years there have been several changes at the board and management level at NSE. Sebi has also instituted various changes in the governance structure of market infrastructure institutions (MIIs), including board committee structures and oversight, tenor of management, accountability for lapses at MIIs, etc, which have strengthened the control environment of MIIs.

NSE said Sebi has been closely monitoring and supervising the operations of NSE and other MIIs, and reiterated its commitment to the highest standards of governance and transparency.