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NSE Scam: Did the safeguards fail or were they weak in the first place?

Questions can be raised as to whether the public interest directors did their job. At the same time, systemic issues in the law governing them and their lack of effective power also need to be examined.

February 24, 2022 / 02:37 PM IST
Serious lapses at exchanges can have wide ramifications, more so as number of retail and other investors have massively increased in recent times. 
 (Photo:Pexels)

Serious lapses at exchanges can have wide ramifications, more so as number of retail and other investors have massively increased in recent times. (Photo:Pexels)


Much has already been said on the market regulator’s findings that the National Stock Exchange of India (NSE)’s former managing director and chief executive officer shared confidential information with a yogi and sought his counsel on crucial decisions.

MD/CEO Chitra Ramkrishna’s near-blind dependence on the spiritual guru based in the Himalayas on important policy matters and taking instructions from him on operational matters, small and big, have astounded many and nauseated some. On further contemplation, other significant ramifications also need to be considered.

Three stand out. One is the role of the Securities and Exchange Board of India (SEBI) itself and whether it did its own job. SEBI has so close an involvement and say in almost all major corporate matters of a stock exchange in India that it is fair to question how how such significant things fell below its radar.

The second is the role of public interest directors (PIDs) who have been given a wide mandate and responsibility.