Bizarre! That is the only word to describe the goings-on at India’s premier stock exchange, National Stock Exchange of India (NSEIL), under its then managing director and CEO, Chitra Ramkrishna, as detailed by capital markets regulator, Securities and Exchange Board of India (Sebi) in its 190-page final order of 11 February 2022.
Truth, it is said, is often stranger than fiction. Given the twists and turns in the tale, it may be a while before the truth finally emerges. Indeed, the events leading up to the resignation of Ramkrishna in December 2016 could easily pass off for the stuff of pulp fiction.
Except that it is not pulp fiction! The events in question relate to the irrational, yet apparently unquestioned conduct of the head of the largest stock exchange, the quiescent (culpable?) nature of its board, consisting of some of the ‘finest’ minds in the country, the deliberate suppression of information in the minutes of its board meetings et al. And last, but not the least, the apparent, but inexplicable, the willingness of the regulator to give a much, much longer-than-warranted rope to Ramkrishna, senior officials of the exchange and NSE before giving its final order in February, close to five years after it first received complaints.
The case pertains to glaring irregularities in the appointment of Anand Subramanian to a senior position at NSE, at a remuneration package much higher than others at a comparable level, solely at the discretion of Ramkrishna in 2013. What makes the chain of events bizarre beyond imagination is Ramkrishna’s claim that both Subramanian’s appointment and his being made privy to confidential information were done at the behest of a mysterious ‘Himalayan Yogi’ with whom she had been in contact, via e-mail, for more than 20 years and who guided her in the running of the exchange.
Stranger claims might have been made in the past. But we are not talking here of some small mom and pop shop or sole proprietorship, where the head could, perhaps, get away with claims that she was guided by some supernatural power. We are talking about someone who was at the helm of the premier stock exchange of the country, who is, or ought to have been, accountable to its board and shareholders and to Sebi. Once again, we are seeing the consequences of unbridled power being exercised by the person at the helm with a pliant board failing to play its expected role of a watchman, as seen earlier in the case of Chanda Kochhar and ICICI Bank.
It is not enough, therefore, that Sebi’s order has treated Ramakrishna’s cock and bull story with the contempt it deserves. The regulator’s final order given by the wholetime member, Anant Barua, says Ramkrishna made an incorrect and misleading submission before NSE that the unknown person was a ‘siddha -purusha’ or ‘paramhansa’ who did not have a physical persona and could materialize at will. Where Sebi falls short is in taking so inordinately long to complete its investigations. And in not coming down harshly enough either on Ramkrishna and other senior NSE officials or on NSE board members, the list of who reads like a who’s who of some of India’s best and brightest – former finance secretary, Ashok Chawla, former NSE, CEO Ravi Narain, YH Malegam, Justice BN Srikrishna, among others.
What is truly amazing is that ‘in spite of having knowledge of such grave irregularities and misconduct on the part of Ramkrishna in the matter of the appointment of Subramanian’, the NSE board, in its meeting on 2 December 2016, allowed her to resign without taking any action against her. On the contrary, the board placed on record its appreciation for her services while accepting her resignation with immediate effect! She was also allowed to encash her unused leave for a whopping amount running into crores of rupees. According to the Sebi order, it ‘neither opposed the serious governance lapses in NSE nor recorded the aforesaid matter in the minutes of said meeting in the name of confidentiality and sensitive information’.
For now, we have the Sebi order listing the irregularities committed by Ramkrishna (detailing also her citing of the supernatural in her defence) and acts of omission and commission by the board. But there is no reason, whatsoever, to let matters rest there. Though the forensic investigation report of EY has concluded that the Yogi was none other than Subramanian and NSE has also concurred with the finding, the case merits investigation by the Central Bureau of Investigation to unearth the truth once and for all. Culpability for the lapses must be fixed and stringent punishment meted out to the guilty/dereliction of duty to ensure such instances, whether of individual acts of malfeasance or of corporate misgovernance, are treated with the seriousness they deserve.
Remember the shenanigans of the former MD have led to a huge opportunity cost to NSE’s shareholders since its long-awaited IPO has been postponed and it is unlikely to get anywhere near the valuations it was expected to get prior to all these developments.
Sebi’s order on Ramkrishna is not the end of the matter; the CBI must be asked to investigate and unearth the truth in a time-bound manner.
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