A former top Indian stock exchange executive promoted to a highly paid job on the advice of a Himalayan mystic who may not even exist has been arrested in a bizarre corporate scandal.

Anand Subramanian was appointed chief operating officer of the National Stock Exchange in 2015 by then CEO Chitra Ramkrishna -- a high-flying woman executive feted as the "queen of the bourse" -- who allegedly took business advice from a "yogi" she met by the River Ganges.

The female chief quit in 2016 after allegations surfaced of market manipulation, and a 190-page report released by regulators this month revealed damning details of how she shared sensitive information with the spiritual adviser.

On Thursday night her former protege Subramanian was detained by officials in the southern city of Chennai in connection with a probe by regulators.

"A Central Bureau of Investigation team arrested Anand Subramanian from his Chennai home late last night," a senior officer with the CBI, India's equivalent of the FBI, confirmed to AFP on Friday.

Ramkrishna, 59, was grilled for 12 hours last week by investigators but has so far not been detained.

In a bizarre twist to the case, CBI officials believe the yogi, whose identity remains unknown, may have been Subramanian himself either manipulating Ramkrishna or acting in league with her as part of a scam.

"(The yogi) would manifest at will and I did not have any locational coordinates," Ramkrishna told the Indian markets regulator. "Accordingly, he gave me an (email) ID to which I could send my requests."

Indians often consult astrologers and spiritual leaders and the business world is no exception in the highly religious nation of 1.4 billion people.

Ramkrishna hired Subramanian in 2013 and later promoted him to chief operating officer on an astronomical salary -- despite him having no relevant experience -- before he resigned in 2016 after the allegations of irregularities surfaced.

Investigators allege brokers were given preferential access to one of the world's largest derivatives exchanges.

Emails uncovered in the probe show the yogi proposed meetings in the Seychelles, one of several tax havens including Singapore and Mauritius where investigators are probing possible tax evasion.

A special lift was reserved for Subramanian and Ramkrishna at the NSE and a dedicated team ensured he had separate hand towels and soap dispensers in the toilet, according to press reports.

Both former executives are barred by authorities from leaving India.