Employees walk past electronic boards displaying stock figures in the atrium of the National Stock Exchange of India (Photographer: Dhiraj Singh/Bloomberg)

NSE Withdraws Rs 100-Crore Defamation Suit Against Sucheta Dalal’s Moneylife

The National Stock Exchange has withdrawn its Rs 100-crore defamation case against Moneylife magazine and its founders Debashis Basu and Sucheta Dalal, for publishing a whistleblower’s letter that alleged the bourse had given unfair advantage to high-frequency traders.

NSE paid Rs 1.5 lakh each to the two founders, and Rs 47 lakh to two charitable trusts, as ordered earlier by the Bombay High Court bench led by Justice Gautam Patel, said a press release by Moneylife. The NSE confirmed the development to BloombergQuint but declined to comment further.

The move to withdraw the suit comes less than two months after the India’s largest stock exchange, under its new Managing Director and Chief Executive Officer Vikram Limaye, filed a consent plea with the market regulator to settle the co-location probe which has delayed its Rs 10,000-crore initial public offering. The investigation was launched by the Securities Exchange Board of India in 2015, and gathered pace in recent months.

In early 2015, a whistleblower letter had alleged that the exchange granted a few brokers and traders preferential access to its co-location facility set up for high-frequency trading. It allowed them to place servers in the exchange building and directly connect with its systems. The alleged preferential access could have allowed traders a split-second advantage in accessing NSE’s data feed.

Moneylife, a fortnightly personal finance magazine published by Moneywise Media Pvt. Ltd., had carried the whistleblower’s letter and a crowd-sourced investigation on NSE’s trading system in July 2015.

NSE moved the Bombay High Court on July 21, 2015 to stop the publication and circulation of the article and also asked the magazine to offer an unconditional apology. Justice Gautam Patel, after hearing the matter, had imposed “severe strictures” and a Rs 50 lakh penalty on the exchange. NSE had filed an appeal against the order in the division bench.

However, on Tuesday, the exchange told the bench that it would honour Justice Patel’s judgement and withdraw appeal in the defamation case.