Govt looking at whether SEBI took adequate measures in NSE matter: Nirmala Sitharaman

Finance Minister NIrmala Sitharaman

Union Finance Minister Nirmala Sitharaman speaking with The Economic Times on the irregularities at the National Stock Exchange (NSE) during the tenure of its former managing director and chief executive officer Chitra Ramakrishna, said the decisions taken were beyond regulation and governance, and that the government is studying the issue to see if the Securities and Exchange Board of India (Sebi) has taken “necessary punitive” action over it.

Stating that the government is analysing if the market regulator has done “enough” in dealing with this matter, and also if it has taken any corrective steps, she claimed that the government won’t entertain or tolerate any perception among investors about the credibility of institutions.

Asked if there is a need for strengthening the regulatory framework, the minister said they will first look at how Sebi handled the issue using its regulatory powers and whether the measures taken have been “adequate and proper”. “And my worry is that the perception outside is probably that they have not. I’m not saying it’s my view. I need to see it,” she said.

Asserting that they do not intend to weaken any institution, Sitharaman said, “We can’t do anything which is going to hurt them from the point of view of their image or their perception. Yet how did NSE look the other way when things were not really happening transparently?”

This is the first public statement from the government on the grave “irregularities and misconduct” at the NSE during Ramakrishna’s tenure.

The minister also spoke on the Ukraine crisis and called for a diplomatic solution, saying the world does not seek a fresh military battle.

Ramakrishna and her deputy Anand Subramanian face charges of mismanagement at the NSE during their tenure. Ramakrishna is accused of making inappropriate appointments, failure to conceal confidential information pertaining to operations at the exchange, and making incorrect and misleading submissions to Sebi. The market regulator last week said an “unidentified Himalayan yogi” had manipulated her and she allegedly provided him confidential information including financial data, five-year projections, dividend ratios and the agenda of board meetings.