CBI files chargesheet in NSE's co-location scam: What is it?
What's the story
The Central Bureau of Investigation (CBI) has filed a final chargesheet in the National Stock Exchange (NSE) co-location scam case. The chargesheet, submitted at Delhi's Rouse Avenue court, names several broking firms that allegedly benefited from the scheme. The investigation began in May 2018 when OPG Securities Pvt Ltd and its owner Sanjay Gupta were accused of compromising NSE's server architecture under the co-location scheme.
Scheme details
Co-location scheme and its exploitation
The co-location scheme allowed brokers to place their computers in the same area as NSE servers, giving them a speed advantage. However, some broking firms and NSE officials allegedly conspired to exploit this arrangement. Gupta is accused of colluding with NSE officials who allegedly gave him information about server switch-on times and access to less crowded servers with advanced technology.
Legal proceedings
Ramkrishna's arrest and the ensuing investigation
The case gained traction after Chitra Ramkrishna's arrest in March 2022 for allegedly compromising NSE's integrity. She was MD and CEO of NSE during the period when the alleged scam occurred. The Ministry of Finance had asked CBI to investigate her role after SEBI ordered an inquiry into Anand Subramanian's appointment as chief strategic advisor (CSA) to Ramkrishna. Subramanian was arrested in February 2022, weeks before Ramkrishna's arrest.
Case closure
Some brokers were exonerated in the case
In May 2022, CBI filed another case against several other brokers on similar charges of compromising the integrity of India's biggest stock market exchange. However, no criminality was found in their actions and a closure report was filed in the case. It was accepted by a Delhi court last month. The agency's chargesheet against Ramkrishna and Subramanian alleged that the idea of co-location was conceptualized during Ramkrishna's tenure as NSE's Joint Managing Director from 2009 to March 2013.