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SEBI tried in right earnest to investigate NSE colocation case: Ajay Tyagi

SEBI tried in right earnest to investigate NSE colocation case: Ajay Tyagi

SEBI tried in right earnest to investigate NSE colocation case: Ajay Tyagi
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By Yash Jain  Mar 2, 2022 5:57 PM IST (Updated)

There is no question about SEBI's orders in the NSE colocation case being weak, said Ajay Tyagi, former Chairman of the market regulator.

Ajay Tyagi, who stepped down from the post of chairman of the Securities and Exchange Board (SEBI) on February 28, said the market regulator tried in right earnest to investigate the National Stock Exchange (NSE) colocation case. He said the matter was "complex" and that the regulator did come out with a series of orders.

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"But there is no question about SEBI's orders in the NSE colocation case being weak," Tyagi said, adding other enforcement agencies had their own mandate on the NSE colocation matter. Explaining there was "no pre-judging any order", Tyagi said there was a possibility of the market regulator missing something in the matter.
On February 22, Finance Minister Nirmala Sitharaman had indicated the government was in the process of examining whether the SEBI took adequate steps in the NSE colocation case. "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 had said.
Certain brokers are said to have benefitted from preferential access on NSE's trading platform between 2010 and 2015. The colocation controversy first came to light in January 2015 through a whistleblower's mail.
The former SEBI chairman said the market regulator found out about corporate governance lapses by former NSE chief executive Chitra Ramkrishna while investigating the NSE colocation case.
When asked whether he was keeping a secret around the Himalayan yogi--who Central Bureau of Investigation sources and E&Y say is none other than former NSE group operating officer Anand Subramanian--Tyagi said: "There is no secret in my heart."
Tyagi agreed there was a delay in the order in the case pertaining to Ramkrishna's working, but blamed it on the COVID-19 pandemic. The delay was not intentional, he said.
Subramanian was arrested by the CBI last week in connection with irregularities in the exchange’s colocation facility.
Tyagi said he would continue to cooperate with other enforcement agencies but underlined that there was a need for more enforcement to come from SEBI, which he said was already using Artificial Intelligence and many more measures on the surveillance side.
"Insider trading is the biggest issue," said Tyagi. "Need to look at the development of the bond market."
On the market regulator's recent reversal on an earlier order asking companies to split the chairman and MD/CEO posts, Tyagi said nearly half of the top-500 companies were non-compliant even after four years of the decision which resulted in the decision. "I hope shareholders themselves ask for a separation of the chairman and MD/CEO position," he said.
He also said public and private sector companies should follow the same set of norms on minimum public shareholding (MPS).
Madhabi Puri Buch, a former whole-time member of the market regulator, took charge as SEBI chairperson on March 1. Tyagi, a 1984 batch IAS officer of Himachal Pradesh cadre, became the Sebi chairman on March 1, 2017. While welcoming Buch at SEBI, Tyagi said: "Job at SEBI will always keep you busy."
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