The Securities and Exchange Board of India (SEBI) has dismissed charges against the National Stock Exchange (NSE) and seven former employees, including ex-MDs Chitra Ramkrishna and Ravi Narain, in a case related to the co-location facility. The regulatory body cited insufficient evidence for the allegations of regulatory violations, reports PTI.
In its 83-page order, SEBI said, “Due to the absence of sufficient material/evidence/objective facts on record in this case, the test of ‘preponderance of probability’ fails to produce enough justification for the establishment of collusion/connivance between OPG (Securities) and its directors with noticees (NSE and its seven employees).”
Charges against Anand Subramanian, Ravindra Apte, Umesh Jain, Mahesh Soparkar, and Deviprasad Singh were also dropped. The case concerned allegations that certain broking firms, including OPG Securities, were given preferential access to NSE’s co-location facilities through ‘dark fibre’ connections.
The latest decision follows a January 2023 directive from the Securities Appellate Tribunal (SAT), which ordered SEBI to review the case and examine any collusion between OPG and NSE employees within four months. SEBI’s order found that while NSE lacked a detailed policy for the co-location facility and failed to monitor the use of secondary servers adequately, this alone did not prove collusion.
SEBI concluded there was no violation of Prohibition of Fraudulent and Unfair Trade Practices (PFUTP) Regulations or Securities Contracts (Regulation) Act (SECC) Regulations.
“When these evidences/material/objective facts did not lead to violation of PFUTP Regulations or SECC Regulations, they cannot lead to determination of collusion/connivance where the establishment of violation would additionally require the presence of ‘conspiracy’ or ‘secret or indirect consent or permission’ making such establishment of violation more difficult,” the regulator added.
More action against OPG Securities
Separately, the market regulator has ordered OPG Securities, Sanjay Gupta, Sangeeta Gupta and Om Prakash Gupta to disgorge Rs 85.25 crore, with interest at 12% per annum from May 22, 2015, until payment. Sanjay Gupta has been barred from the securities market for six months, in addition to a previous five-year debarment.