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ED arrests former NSE CEO Ravi Narain in money laundering case

The Law Enforcement Branch on Tuesday arrested Ravi Narain, the former managing director and CEO of the National Stock Exchange (NSE), in connection with a money laundering case linked to alleged illegal wiretapping of the stock exchange employees. He served as managing director and CEO of the exchange between April 1994 and March 2013, before being named non-executive vice-chairman in April 2013. He served as vice-chairman until June 2017.

The ED had in July arrested Chitra Ramkrishna (who had succeeded Narain as managing director of the exchange) and former Mumbai Police Commissioner Sanjay Pandey in the case.

Ramkrishna served as Managing Director and CEO of NSE from April 2013 to December 2016.

The agency claimed that iSec Securities Pvt Ltd, an IT audit firm linked to Pandey, illegally tapped the phones of NSE employees between 2009 and 2017 on instructions from Ramakrishna. Sources have now said Narain also played a role in allowing illegal wiretapping.

This ED case is based on an FIR recently filed by the Central Bureau of Investigation against Pandey, iSec Securities and Ramkrishna, among others. Seeking Ramkrishna’s dismissal, the ED had told Special Judge Sunena Sharma’s court that the payment of Rs 4.54 crore to iSec Securities for ‘periodic study of cyber vulnerabilities’ was allegedly wiretapping.

“Work orders/contracts/agreements were handled by Chitra Ramkrishna during her tenure as Deputy Managing Director and Managing Director of NSE. During the entire period of the infringement, i.e. from 01.01.2009 to 13.02.2017, Ms Chitra Ramkrishna held the position of Deputy Director General (until 2010) or Co-Director General (until 2013 ) or chief executive (until December 2016) of NSE, the ED told the court.

He also alleged that there was evidence showing that the iSec services contract coincided with Chitra Ramkrishna’s move to NSE.

“It is further revealed that after leaving the post of Managing Director of NSE in December 2016, the contract for the so-called “periodic study of NSE’s cyber vulnerabilities” expired on 13.02.2017 and never was subsequently renewed, thus proving that the said the illegal activity was co-terminal with her key position as co-CEO/CEO of NSE, the ED had stated.

This is the second case relating to the manipulation of the NSE colocation facility by certain brokers. The first ED case is based on a CBI FIR which alleged that during Ramkrishna’s tenure as CEO, certain stockbrokers illegally obtained preferential access to the NSE server through his colocation facility, resulting in huge financial gains.