SEBI fines Ajay Shah, 7 others 110 mln rupees in NSE governance case

30 Jun 2022

The Securities and Exchange Board of India today fined eight entities 110 mln rupees in a case that alleged misgovernance at the National Stock Exchange of India with regard to exclusive use of confidential and sensitive data for the period from 2009 to 2016.

Ajay Shah, an academician who was closely associated with NSE since 1994, was levied a penalty of 30 mln rupees, while Infotech Financial Services was fined 20 mln rupees and Suprabhat Lala, Sunita Thomas and Krishna Dagli were fined 10 mln rupees each.

SEBI also levied a penalty of 10 mln rupees each on the NSE and two former managing directors, Chitra Ramakrishna and Ravi Narain.

In its order, SEBI held that its investigations had provided a clear picture of irrefutable preponderance of probability of a nexus amongst Shah, Infotech, Thomas, and Dagli to use NSE’s liquidity index project as a conduit to achieve their commercial goals.

SEBI held that Shah had exerted his influence over NSE to get the contract for computing of liquidity index awarded to Infotech in which Thomas and Dagli were directors.

SEBI fined Lala on the ground that he was a senior official in NSE during the period in question, was the spouse of Thomas and was found to have had a close nexus with Infotech, Thomas and Shah in the entire scheme.

The NSE and its former heads Ramakrishna and Narain were held by SEBI to have committed “glaring negligence and irregularities as well as procedural lapses” while executing data use agreements with Shah.

SEBI said that they had “failed to ensure proper due diligence with respect to execution of agreements and to ensure fair dealing while executing these agreements and thereby have compromised on the integrity of the securities market.”  End