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Why did ED arrest former NSE CEO Ravi Narain?

Akshata Kamath
Akshata KamathSep 07, 2022 | 13:58

Why did ED arrest former NSE CEO Ravi Narain?

Ravi Narain was the MD and CEO of NSE. (Photo: India Today)

Former CEO and MD of the National Stock Exchange (NSE), Ravi Narain, was arrested by the Enforcement Directorate (ED) in connection with the money laundering case related to the alleged illegal phone-tapping of NSE employees and the co-location scam.

ED says that Ravi, Chitra Ramkrishna and others had conspired to cheat NSE and its employees and Sanjay Pandey's iSec Services was a part of the plan.Some context: Ravi Narain was the Managing Director and CEO of the NSE between April 1994 and March 2013. Then he climbed up the corporate ladder and became 'Non-executive Vice-Chairman' from April 2013 till June 2017. When Ravi Narain became Vice Chairman, Chitra Ramkrishna took Ravi's position as the MD and CEO of NSE from April 2013 to December 2016. The co-location scam happened between 2010 and 2015.

Ex-MD and CEO of NSE Ravi Narain. (Photo: India Today)

Who got arrested when? You may remember how in July 2022 the CBI registered a case against the NSE trio- Chitra Ramkrishna, Ravi Narain and Sanjay Pandey for illegally tapping phones at NSE. Based on this case, the ED too had filed a money laundering case on the trio and arrested Chitra Ramkrishna and Sanjay Pandey in July 2022. The only one left, Ravi Narain, was arrested late at night on September 7, 2022.

Sanjay Pandey and Chitra Ramkrishna were arrested in relation to NSE's co-location facilities that were launched in 2009 and the subsequent efforts both took:

  • To break SEBI's rules
  • Cause losses to NSE 
  • Illegally intercept phone calls of NSE's employees using a third company called iSec Services
  • Hide this interception under the disguise of a ''regulatory study''
Ex-MD, CEO and Vice Chairman of NSE Ravi Narain. (Photo: India Today)

Why is Narain arrested? What is his role? 

If you remember something about the co-location scam, some brokers who used NSE's co-location facilities got split split-second benefits while trading in shares. They made crores of rupees in profits by using loopholes in regulations and also put other traders at a disadvantage. That's not all. An IT firm iSec Securities which normally conducts security audits was hired to illegally tap the phones of NSE employees for Rs 4.45 crore. Though NSE paid another Rs 8 crore for professional security audits, the security audits were performed by unprofessional folks and did not throw any red flags in the system audits.  

In July 2022, the ED claimed that iSec Securities Pvt Ltd, an IT audit firm, had illegally tapped the phones of NSE employees between 2009 and 2017 upon Chitra Ramakrishna’s instructions.

Recently, when a Delhi court was hearing the bail application of Chitra Ramkrishna, her bail was rejected as ED opposed the bail. ED now says that from 2009 to 2017, Ravi Narain, Chitra Ramkrishna and others (Executive Vice President Ravi Varanasi and Head (Premises) Mahesh Haldipur) conspired to cheat NSE and its employees and iSec Services was a part of the plan.

Last updated: September 07, 2022 | 13:58
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