NSE, ex-chiefs get SAT relief in colocation case

Tribunal sets aside ₹625-cr disgorgement order against the bourse, finds no 'unethical act'

- KHUSHBOO TIWARI

The Securities Appellate Tribunal (SAT) on Monday set aside the market regulator's disgorgement orders against the National Stock Exchange (NSE) and its former top executives Chitra Ramkrishna and Ravi Narain in the colocation case. The tribunal noted that the NSE had not indulged in any unethical act or unjustly enriched itself.

The Securities and Exchange Board of India (Sebi), in an order issued in April 2019, had directed the NSE to disgorge 625 crore along with an annual interest of 12 per cent, to be calculated from April 2014, for alleged violations of the Stock Exchanges and Clearing Corporation (SECC) Regulations due to lapses at its colocation facility.

The SAT set aside this penalty and, instead, directed the NSE to deposit ₹100 crore for lack of due diligence in following its own norms and circulars. This will be adjusted against the amount already paid by the NSE, and Sebi will have to refund the excess amount to the exchange within six weeks. The tribunal also observed that there had been no finding that Ramkrishna or Narain, former MD & CEOs of the NSE, had made profits or wrongful gains.