SAT overturns SEBI fine of 70 mln rupees on NSE in dark fibre case
Informist, Thursday, Dec 14, 2023
–SAT overturns SEBI fine of 70 mln rupees on NSE in dark fibre case
–CONTEXT: SEBI fined NSE, 16 others in Jun 2022 in dark fibre case
–SAT cuts SEBI fine vs former NSE MD Ramakrishna in dark fibre case
–CONTEXT:SEBI had fined Ramakrishna 50 mln rupees in dark fibre case
–SAT reduces SEBI fine on former NSE official Ravi Varanasi
–SAT reduces SEBI fine on Ravi Varanasi in dark fibre case
–CONTEXT: SEBI had fined Varanasi 50 mln rupees in dark fibre case
MUMBAI – The Securities Appellate Tribunal today overturned the penalty of 70 mln rupees imposed by the Securities and Exchange Board of India against the National Stock Exchange of India in the dark fibre and leased connectivity line case.
In an order uploaded on its website, the tribunal also reduced penalties of 50 mln rupees levied earlier on former NSE managing director Chitra Ramakrishna to 2.5 mln rupees.
Further, SEBI's penalties of 50 mln rupees against former NSE official Ravi Varanasi, who was in charge of the co-location business at the exchange, were cut to 500,000 rupees.
SEBI had issued an order on Jun 28, 2022, imposing penalties aggregating to 438 mln rupees against 18 entities, including NSE, Ramakrishna, and Varanasi, in the dark fibre and leased line connectivity case.
The case involved alleged preferential treatment given by NSE to two brokers, Way2Wealth Brokers and GKN Securities, by allowing them to use the services of an unlicensed telecom service vendor, Sampark Infotainment, to connect their co-location servers in NSE with that of BSE's.
In today's order, the tribunal also cut penalties of 40 mln rupees against broker GKN Securities to 2 mln rupees. It reduced the penalty of 10 mln rupees against Way2Wealth Brokers to 2 mln rupees.
The tribunal also cut the penalty of 30 mln rupees against Sampark Infotainment to 2.5 mln rupees. It also overturned penalties of 40 mln rupees against former NSE group operating officer Anand Subramanian.
The tribunal similarly cut or overturned fines against a few other entities involved in the case. Most of the 18 entities affected by SEBI's order had appealed to the tribunal.
SEBI had charged NSE, Ramakrishna, the two brokers, and a few others, with fraud along with breach of other norms. The quantum of penalties levied for breach of anti-fraud regulations against a few entities formed a large proportion of the total penalties imposed on the involved parties.
The tribunal quashed all the penalties against the affected entities that were imposed on account of fraud charges, saying that the charges were not proved. But in cases which involved other breaches, the tribunal partially upheld SEBI's charges but reduced the quantum of penalties.
In an order in August, the tribunal had quashed the SEBI order directing NSE to disgorge 625 mln rupees in the same dark fibre matter. This pertained to SEBI's order of April 2019. The tribunal, in its August order, had also quashed the disgorgements against the two brokers, and partly upheld SEBI's charges on a few entities, including NSE and the two brokers. End
