'Himalayan Yogi' row: NSE must look at all names in SEBI order, 'take them out', says M Damodaran

Damodaran, who refrained from speculating who the 'Yogi' is, said the "need is to investigate how governance lapses happened in NSE thoroughly. The NSE management got an easy pass, and the board gave itself a long rope. SEBI is questioning why confidential information was passed on to outsiders".

Damodaran also marked apprehensions over the role of Anand Subramanian, who was a mid-level manager at Balmer and Lawrie earning Rs 15 lakh per annum, before being onboarded at NSE with a Rs 1.68-crore package.

"Everyone seemed to know what was happening, but no one thought it fit to challenge. No one seemed to bother, and no one questioned Subramanian's phenomenal power," he said.

Notably, allegations of corporate governance lapses have dogged NSE for several years. The exchange had planned to go public in 2017 but its listing was derailed by allegations officials had provided some high-frequency traders unfair access through co-location servers, which could speed up algorithmic trading.

After a three-year investigation, SEBI fined the exchange over $90 million and barred it from raising money on securities markets for six months. NSE challenged the order in court and has sought SEBI's approval to file for a new IPO.

However, during that investigation, SEBI found documents showing Ramkrishna's emails to an unknown person, who she said during questioning was a "spiritual force" she had sought guidance from for 20 years.

Ramkrishna, in her defence, told SEBI that sharing of information with the person who was "spiritual in nature" did not compromise confidentiality or integrity.

The SEBI order however stated that it was "absurd" for Ramkrishna to contend that sharing sensitive information such as dividend pay-out ratios, business plans and the performance appraisals of NSE employees did not cause harm.

The SEBI probe also found the purported guru had substantial influence over the appointment of a mid-level executive, without any capital market experience, directly as an adviser to Ramkrishna with inadequate documentation and a salary higher than most senior NSE officials.

The guru was running the exchange, and Ramkrishna was "merely a puppet in his hands", SEBI said.

Questions emailed to an address given in the SEBI order as belonging to the guru were not immediately responded to.

SEBI also said NSE and its board were aware of the exchange of confidential information but had chosen to "keep the matter under wraps".

The regulator fined NSE 20 million rupees ($270,000) and has barred the exchange from launching any new products for six months.

SEBI imposed a penalty of 30 million rupees on Ramkrishna and barred her from any bourse and SEBI-registered intermediary for three years.

Ramkrishna was among a group of executives who in the early 1990s started NSE as a challenger to the more established BSE Ltd, then known as Bombay Stock Exchange. She was appointed joint managing director of NSE in 2009 and promoted to CEO in 2013.

With Reuters inputs.