NSE scam: The dramatis personae

In the NSE scam, there are the accused, the exonerated and those under fire for not doing a good job. (Photo by Francesco Ungaro from Pexels)

In the NSE drama that is being staged, there are various actors.

Just so that you don’t lose track of them, here’s a quick reference on the dramatis personae–the accused and the exonerated, and then there were those under fire for not doing a good job.

Here’s one curious fact before you start reading. The firm that was hired to do the secretarial audit of NSE and who raised the matter of the irregular hiring–of former Group Operating Officer (COO) Anand Subramanian–is named SN Anantha Subramanian & Co.

So, the investigator and the investigated shared extremely similar names. Just another absurdity in this string of absurdities.

Read also: How the NSE scam unfolded

Chitra Ramakrishna

She had been praised and awarded for being the first woman to lead a stock exchange and for being part of NSE’s founding team. That was three decades ago. Today, she stands accused of corporate misgovernance for allowing an outsider to run the exchange by proxy and making an inexplicable hire for a senior management post, paying a salary disproportionate to his experience. These were revealed when the regulator was investigating the co-location scam, in which the NSE was accused of giving some brokers preferential access to price feeds. The former MD and CEO of the NSE resigned in 2016, and has been fined Rs 4 crore in all. 

Ravi Narain

The former vice-chairman of the exchange had been feted in the early years too, much like Ramakrishna, for founding NSE. In June 2017, he stepped down from his VC position, after the co-location investigations had started. As early as October 2016, he had been made aware of the email exchanges between Ramakrishna and the yogi. But Sebi’s order noted that he didn’t oppose the serious governance lapses and didn’t record this in the minutes of the meeting held on November 29, 2016, citing confidentiality. He has also been accused of making incorrect and misleading submissions to Sebi regarding the appointment of former Group Operating Officer Anand Subramanian, and faulted for allowing Ramakrishna an honourable exit, even recording an appreciation for her in a Board meeting held on December 2, 2016. He has been fined Rs 2 crore by the regulator. 

VR Narasimhan

The former Chief Regulatory Officer and Compliance Officer has been fined Rs 6 lakhs, for furnishing incorrect and misleading submission before Sebi. He had claimed there had been no violation of SECC Regulations, 2012, in the appointment of Subramanian. But under the regulations, Subramanian’s role would fall under the Key Managerial Personnel (KMP) function, since he had department heads reporting to him, and this required his hiring to be cleared by the Nomination and Renumeration Committee (NRC) and the Board. Narasimhan was found wanting in exercising due diligence in the performance of his duties. 

Read also: Insiders speak of a savvy Ramakrishna, dismiss ingenue story

Anand Subramanian

The former GOO of NSE misled Sebi about his recruitment appointment, according to the regulator’s order. During the investigation, he had claimed that he had applied for the job through an HR consultant but that was found to be false, when set against testimonies from Ramakrishna and Chief People Officer at NSE, Chandrasekhar Mukherjee. The Sebi also found him guilty of deliberately downplaying his position, to avoid the scrutiny of the Board and NRC; and conniving with the ‘yogi’ to manipulate Ramakrishna. He has been fined Rs 2 crore. 

J Ravichandran

The Group President of NSE and Company Secretary was accused of ignoring alarms repeatedly raised by the secretarial auditor, regarding the appointment of Subramanian. The auditor had said that the hiring should get the clearance of the NRC and the Board. But the Sebi order found that the accusations against Ravichandran did not hold, because he had forwarded the concerns to Ramakrishna and Mukherjee, and had passed on Mukherjee’s replies to the auditor. Mukherjee had replied that Subramanian is a consultant, not on the roles of the NSE and therefore is not holding a Key Management Personnel function, which would require the NRC/Board approval. The Sebi also found Ravichandran fault-free because the hiring of Subramanian had been raised at the Board meeting after the red flag was raised. 

Public Interest Directors

The Sebi appoints Public Interest Directors (PIDs), who act as Independent Directors, to ensure that the interests of the investors in the securities market is not compromised by the actions of the company. 

 The Sebi noted that none of the NSE’s PIDs informed the regulator when the NSE Board failed to act with integrity and put the reputation of the stock exchange in jeopardy.

The following were the PIDs who had been informed–from Board meetings held on October  21, 2016, and on November 29, 2016–about Subramanian’s irregular hiring, and Ramakrishna emailing the ‘yogi’ and sharing confidential information with this unknown person. 

*Mohandas Pai, who is a Padma Shri Awardee and former Board Member of Infosys. According to an annual report of NSE from 2020, he was given an annual compensation of Rs 23,50,000 for attending board and committee meetings.

Read also: Pai, Shaw spar again, this time over NSE 'yogi'

*Naved Masood is the former secretary at the ministry of corporate affairs. According to the annual report, he was drawing an annual compensation of Rs 30,25,000 for attending board and committee meetings. 

*Dinesh Kanabar is KPMG India’s former Deputy CEO and CEO of Dhruva Advisors. The report says that he was given an annual compensation of 28,75,000 for attending the meetings.

*Dharmishtha Raval is an advocate and former Executive Director at Sebi. The report says she was drawing an annual compensation of Rs 13,75,000 for attending the meetings. She ceased to be a PID in August 2019, and Pai, Masood, Kanabar ceased to be PIDs in February 2020.