The Securities Appellate Tribunal (SAT) on Monday granted interim stay on the orders passed by the Securities and Exchange Board of India (Sebi) against three senior officials of the National Stock Exchange (NSE).
The regulator in its order had said that the three officials — Ravi Varanasi, head of business development, Nagendra Kumar SRVS, head of membership department, and Deviprasad Singh, head of colocation support — were guilty of colluding with stockbrokers Way2Wealth Brokers and GKN Securities, leading to the latter gaining an unfair advantage over other brokers in access of price feed.
Sebi had barred the three officials from holding any position with any stock exchange, clearing corporation, depository and any intermediary registered with it for two years. Varanasi was barred from holding a position with a listed company for three years.
“The three employees are not further up the chain to the extent that they can disclaim knowledge of what has transpired. They all have been in one manner or another, decision-makers as far as the issues are concerned. It is not in dispute that they made fairly critical decisions in this matter,” said the Sebi counsel.
The counsel for NSE employees argued that Sampark Infotainment’s dark fibre was not in the trading path but used for back-office connectivity for the purposes of control of the algo unit. “They say there is some mischief but nobody has identified what or where or how,” he said. Sources said, following the SAT relief, Varasani and two others have been asked to resume office in the same capacity.
The three brokerage firms that gained unfair access to NSE systems were also granted interim relief. These brokers — OPG Securities, Way2Wealth Brokers and GKN Securities — have to deposit 50 per cent of the disgorgement amount as security by May 20. Sebi has directed them to disgorge Rs 15.57 crore, Rs 15.34 crore and Rs 4.9 crore, respectively. The next hearing on the matter will be on 22 July.