The Securities Appellate Tribunal (SAT) has granted an interim relief to Chitra Ramkrishna, former managing director & chief executive officer of the National Stock Exchange, in a recent case involving alleged governance lapses.
In February this year, the Securities and Exchange Board of India (Sebi) had imposed a penalty of Rs 3 crore on Ramkrishna and also directed the NSE to forfeit Ramkrishna’s excess leave encashment of Rs 1.54 crore and deferred bonus of Rs 2.83 crore. Sebi had directed the NSE to retain and deposit the same in its investor protection fund. The regulator had penalised the NSE, Ramkrishna and her predecessor Ravi Narain for governance lapses in appointing Anand Subramanian as the exchange’s group chief operating officer (COO) and an advisor to Ramkrishna.
In its order posted on the SAT website on Monday, presiding officers Tarun Agarwala and Meera Swarup directed the NSE to deposit Rs 4.73 crore towards leave encashment and deferred bonus of Ramakrishna in an escrow account, instead of depositing it in the Investor Protection Fund Trust. Such deposit in an escrow account would be subject to the result of the appeal, they said.
The SAT will consider all other arguments during the next hearing, which is likely to take place on June 30.
The SAT has also directed Ramakrishna 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,” the SAT said while disposing of the stay application.
Ramkrishna’s counsel had contested Sebi’s decision to impose the penalty under the Section 23A of the Securities Contracts Regulation Act, arguing that the 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”.