So our story starts back in 1984 when our first and only woman prime minister, Indira Gandhi  was assassinated in broad daylight. The incident shocked the whole country, but the bigger setback was for women because their icon for female empowerment, the iron lady of India was gone. It was against this backdrop, a tall, confident girl named Chitra RamaKrishna walked into the office of a banking giant, IDBI to work in their project finance division. This 20 year old chartered accountant was not afraid to establish herself in a male dominated banking industry because she was talented and she knew it.

She started rising through the ranks and the senior management at IDBI started to notice her. Now, two of them were industry veterans, RH Patil and SS Nadkarni who had some grand plans for the Indian stock market. Now, remember, this was back in the early 1990s when there was only one stock exchange in India, the Bombay stock exchange.

Hence there was a proposal among senior government officials to start a new stock exchange, to promote fairness and competition. Now Chitra, with her unmatched talent, charisma and confidence became an obvious choice to lead the task force. So the IDBI chairman at the time, SS Nadkarni selected Chitra to set up the NSE from scratch.

She became part of the team that set up NSE to provide a fully automated and screen based trading system. Just to give you guys a context, this is how trading used to be done back in the 1990s and this is how trading is done today. Hence a lot of the credit goes to Chitra RamaKrishna and so she quickly started climbing the ladder of success.

In 2013, she became the CEO of National stock exchange and she was the third woman in the Asia-Pacific region to head a major stock exchange. She clearly became the darling of the media and the poster child for women in leadership positions and so her fame just kept growing.

The next year, she was also named the Forbes leader of the year and the fortune magazine ranked her among one of the most powerful women around the world. Chitra was at the peak of a career and nothing could go wrong, but then something did happen. On 8th of July, 2015, Sucheta Dalal, who had exposed the Harshad Mehta scandal, wrote an article alleging that certain NSE officials were leaking sensitive data to select market participants so that they could trade faster than their competitors.

Now NSE’s response to this allegation was rather bizarre because, instead of setting up an inquiry or checking out as to what was really going on, their first reaction was to threaten Sucheta. They filed a defamation lawsuit against her for $1 billion. Now this heavy handed approach against a very respected journalist raised concerns among many industry people.

Then, in November of the same year, the stock market regulator, SEBI received a letter from an anonymous whistleblower who claimed that there was a conspiracy going on in the NSE where the senior officials at NSE, along with the bureaucrats in the finance ministry and the central government were manipulating the system.

Now, of course, this was a serious allegation and so the matter got CBI’s attention and soon SEBI and the Income tax department started to look into these allegations. This scam, which later came to be known as the NSE co-location scam, was unlike any other scam that the investigating officials had ever seen, because first of all, there were no victims in this scam.

Normally whenever you see a scam, there is always some kind of a victim. It can be one person or an institution, or maybe a bunch of institutions. For example, in the case of Nirav Modi’s scandal, there was Punjab National Bank, but the brilliance of this scam was that there were victims, but they just did not know it. The easiest way to understand this is, assume somebody stole 10 Lakhs rupees from you. You will immediately come to notice that there’s something wrong and then you will start taking action. However, if the same person steals 10 paise from you every day, how long do you think it will take for you to see noticeable changes in your bank balance?

It could be probably several years or maybe never. So in this case, the thief was stealing 10 paisa, not just from one person, but was stealing it from millions of people and this was happening billions of times. So this is what happened. In August of 2009, when Chitra became the managing director, she introduced what is called a co-location facility, which allowed brokers to place their servers in the same data center as NSE and these brokers and these institutions had to pay a fee for that. What is the reason for having your servers at the same place as NSE? Well, because when the broker’s server sits right next to the stock exchange server, the data has to physically travel a very short distance from the exchange server to the broker server.

This was a big advantage to all the trading members engaged in high frequency trading. Now, the difference in time between a co-located versus a non co-located server can be barely milliseconds, but it can make all the difference between a profitable trade and not being able to place a trade at all because a co-located server gets the quote first and the trade would be executed by the time a broker of a non colocated server got to even see it, but there was nothing illegal about this.

This practice is perfectly legal and in fact, followed all around the world. However, there was something illegal about what they did next. What happened was that NSE officials started giving preferential access to certain brokers because of which these guys were able to skip the line and access all the information before it got distributed to the rest of the co-located participants.

Just imagine that if you knew the price of a stock before the rest of the participants did, you could make a lot of money. That is basically what was going on and I do not want to get into too much technical stuff here. Essentially, some brokers got advantage of speed and early access.

Now the investigators found that this scam ran into hundreds of crores, but that was not the most shocking or bizarre part of the story. As part of their investigation, CBI started to look into the emails of senior NSE officials and they found out something that they had never expected because it turns out that Chitra Ramakrishna was seeking guidance from some mysterious Himalayan Yogi. That was not necessarily a problem, except the fact that the guidance that she was looking for was not in a spiritual sense. She was actually sharing sensitive company information and seeking guidance on the company’s day to day operations, and a lot of other things from the spiritual Yogi.

Chitra claims that she knew this Yogi for the past 20 years and she met him for the first time, somewhere in the Himalayas. Ever since they have been in touch over emails. People who have read these emails found the nature of relationship between the two very disturbing because, sometimes the conversations used to be very company specific on confidential topics on day to day operations and sometimes they actually got very personal.

Sometimes a Yogi used to give her feedback about how she looked and how she can look more appealing. Sometimes they used to plan for personal trips in countries, such as Seychelles which are known to be tax havens. Clearly there was a lot going on here, both on the professional side, as well as on the personal side.

The story gets even more interesting because, on the advice of this Yogi, Chitra hires a guy named Anand Subramanian to the position of chief strategy officer. Now, nothing seems suspicious about this, except the fact that there was no position called Chief Strategy officer before this guy even joined.

This position was actually created for him and he was paid a whopping salary of Rs.1.68 crores, whereas what he was making in his previous job was merely 15 lakhs rupees. In addition to that, he was promoted in a very short period of time to the role of group operating officer and his salary went up to 4 crores rupees.

On top of that, he used to get a lot of exemptions. He was given the flexibility of working from home and was given royal treatment at the NSE. He could travel business class and used to get business accommodation.

So what, what exactly is going on here? What we have here is an unholy nexus of Chitra, Anand and this mysterious Yogi and all these three in some shape or form orchestrating the co-location scam.

The investigative agencies were able to catch hold of Anand Subramanian but their real target was this mysterious Yogi. Now, this is where a lot of speculations started to happen because some people thought that the Yogi is none other than Anand himself since he was the key benefactor of this scandal.

Then some started to believe that maybe yogi is related to Anand somehow, but he’s not exactly Anand himself. Well, the mystery is still not solved and NSE officials claim that Anand is Yogi himself, whereas NSE officials believe that Yogi might be somebody else.

This is currently an ongoing investigation and Chitra has been sent to jail as we speak and Anand Subramanian is also in custody, but there are a lot of unanswered questions in this story. For example, when all these allegations emerged, Chitra resigned from NSC and she was paid Rs.23 crores at that time.

Then the question comes as to why the NSE was paying Chitra this high of an amount instead of firing her. Secondly, as soon as Chitra left the company, her laptop was destroyed and all the evidence was lost. Now, NSE claims that it is a policy to destroy all the e-waste, but it is also very convenient because the laptop had a lot of evidence which could have easily led to the perpetrators of this scam.

Why did SEBI and the CBI take 6 years to unearth this scandal and to get to the point where we are today, given that the scam was already uncovered back in 2015? The more we learn about the story, the more scandalous it becomes, but at some point we also start to believe that Chitra Ramakrishna may not be the real culprit here, maybe she was part of a broader conspiracy that runs deep into the annals of Indian bureaucracy and politics. All said and done, we know how these kinds of stories play out. The real culprits are never brought to justice because even in this case, Chitra has been penalized with a few crores as fine, but that amount is clearly peanuts as compared to what she was earning. Whatever happens, we will come to know about that at some point.

One thing is for sure that Chitra’s fall from grace is a blow to the world of the stock market and all the women who looked up to her for breaking the glass ceiling in the male dominated world.