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The Central Bureau of Investigation (CBI) has questioned National Stock Exchange (NSE) former chief executive officer (CEO) Ravi Narain in the case related to the co-location scam amid fresh revelations about irregularities at the country’s largest stock exchange.
“Contrary to some reports, Narain is very much in India and he was examined by CBI in Delhi on Saturday,” said a CBI official, on condition of anonymity.
CBI on Friday questioned Chitra Ramkrishna, former managing director (MD) and CEO of NSE. The agency issued lookout circulars against her, Narain and Anand Subramanian, group operating officer, to prevent them from leaving the country. Business Standard on Saturday reported that CBI is likely to interrogate Narain also.
Narain was the MD and CEO of NSE from April 1994 to March 31, 2013. Thereafter, he was appointed vice-chairman, in a non-executive category on the company’s board from April 1, 2013 to June 1, 2017.
A Securities and Exchange Board of India (Sebi) order states that Narain, in spite of being aware of the irregularities on the appointment of Subramanian as group operating officer and correspondences of confidential information by Ramkrishna with unknown person on October 21, 2016, and November 29, 2016, neither opposed the serious governance lapses in NSE nor recorded the aforesaid matter in the minutes of the meeting in the name of confidentiality and sensitive information.
Further, the report on irregularities was submitted to Sebi only after repeated reminders.
The report also states that Narain had made incorrect and misleading submissions before Sebi on the appointment and selection of Subramanian.
The CBI action came days after the income tax (I-T) department raided the premises of Ramkrishna and Subramanian. It was to gather evidence on charges of alleged financial irregularities and tax evasion against the two.
As the I-T department continues its investigation on Ramkrishna and Subramanian, it will also look at what the Enforcement Directorate (ED) found in its investigations into the co-location scam, an official said.
The tax department has been examining a possible fund diversion to tax havens.
Meanwhile, the ED has been exploring the money laundering angle in the NSE co-location case since 2018.
“We will coordinate with the ED as part of our investigations and see if there are dots that can be connected from their investigation into the co-location case. There has been frequent travel to tax havens like Singapore and Mauritius by the persons under investigation. One has to see if money laundering provision comes in,” a government official said.
ED had filed its enforcement case investigation report in January 2019, following the CBI’s FIR in the case on May 28, 2018. It was against OPG Securities’ promoter Sanjay Gupta, his brother-in-law Aman Kakrady and Ajay Shah, who facilitated Gupta’s operations by developing and providing a software called Chanakya. It was also against some unnamed officials of NSE and Sebi.
Sebi had, in February 2021, dropped allegations of fraudulent and unfair trade practices against NSE’s former heads Narain and Ramakrishna in the co-location case. It had only charged them for violation of the Securities Contracts Stock Exchanges and Clearing Corporations (SECC) Regulations.
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