The curious case of Chitra Ramkrishna’s faith in a ‘siddha purusha’ has brought under the scanner four men—Anand Subramanian, Ravi Narain, VR Narasimhan and J Ravichandran. While Subramanian rose to become group operating officer (GOO) at the National Stock Exchange (NSE) from advisory consultant in just two years, former CEO Ravi Narain and former Chief Regulatory Officer VR Narasimhan have been accused of watching his ‘arbitrary’ appointment and promotion silently. Ravichandran, the group president and company secretary of NSE, was accused of ignoring concerns raised by the secretarial auditor on the appointment of Subramanian as GOO and advisor to the managing director (MD) without the approval of the Nomination and Remuneration Committee (NRC) and the board, but the Securities and Exchange Board of India (SEBI) absolved him of these charges on the ground that he had forwarded the concerns to Ramkrishna and human resources. Subramanian, as per the SEBI order, has been barred from associating with any market infrastructure institution or any intermediary registered with SEBI for three years, and Narain for two years. The two have been penalised with a ₹ 2 crore penalty per head.
His role as consultant at NSE had evoked suspicion in several quarters that he could be the mysterious ‘Himalayan yogi’ who Chitra Ramkrishna claims had been advising her as her spiritual guru for two decades. Brought into NSE by Ramkrishna, who was the only person who interviewed him, he went on to become GOO within two years after he was appointed advisory consultant with effect from April 2013.
“Mr Subramanian brings with him 21 years of rich experience and expertise in various fields and will facilitate advise in the areas as required from time to time from the office of MD and CEO [sic],” the announcement on his appointment had said. Ramkrishna was then MD and CEO of NSE. It did not specify how his previous experience would be relevant at NSE.
The SEBI order traces the meteoric rise of Subramanian, known as Subbu. Before joining NSE, he was VP Leasing & Repair Services of Transafe Services Limited, a subsidiary of Balmer Lawrie, earning an annual salary of ₹ 14.75 lakh. His salary rose over 11 times at NSE at the time of appointment. He was offered ₹ 1.68 crore a year for working as a consultant for four days a week. In a year, the amount was increased to ₹ 2.016 crore per annum. Subramanian, who reported directly to the CEO and was evaluated by her, was given the highest rating of A+. In March 2015, he was given a 15 per cent raise, taking his annual salary up to ₹ 3.3 crore and designated as GOO and advisor to MD. He was never designated as a key management person (KMP), a move that would have required the approval of NRC. Subramanian went on overseas trips and made frequent visits to Chennai although he was officially based out of Mumbai. His wife Sunitha, who was with NSE’s regional office in Chennai, was made consultant at ₹ 60 lakh a year from April 2013, the same time when Subramanian took charge as advisory consultant.
“Pretty soon, it was clear that the advisory consultant was effectively the Number 2 in the organisation. Chitra would not clear any decisions unless they were routed through Subbu. She ensured that nobody had any doubts about his position by giving him an office on the same floor as hers. There was only one other office on that floor, which was for the visiting chairman or vice-chairman and it had access to a reserved elevator,” write Sucheta Dalal and Debashis Basu in their 2021 book Absolute Power: Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam.
The yogi theory brought him in the eye of the storm. Ramkrishna told SEBI in April 2018 that the identity of the email id holder firstname.lastname@example.org is the “Siddha Purusha”, a Paramahansa who may be largely dwelling in the Himalayas. Apparently, the yogi, whom Ramkrishna said she often sought guidance from on various matters, held Subramanian in high regard. The NRC report, however, noted in November 2017 that there was no evidence to provide any basis for Subramanian’s performance evaluation as A+.
His exit from NSE was dramatic. Dinesh Kanabar, the then chairman of NRC, was investigating his recruitment. Dalal and Basu write: “Kanabar was very clear how it would be done. Chitra was called in and told that ‘he (Subbu) has to go right now’. She was asked to leave the room right away, inform him that he had to go, take charge of his computer and access cards, etc, escort him out of the building and report back to the board in 15 minutes. There was no question of any argument, time or compromise on the matter; and she complied. Subbu also had to vacate his apartment that very day. Subbu’s wife continued with NSE until December, when she was also eased out.”
Apparently, the Himalayan Yogi held Subramanian in high regard. The NRC report, however, noted in November 2017 that there was no evidence to provide any basis for his performance evaluation as A+
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In February 2020, SEBI issued a showcause notice to NSE over the appointment and promotion of Anand Subramanian. He has, recently, been questioned by the Central Bureau of Investigation (CBI) over three days in light of the SEBI order.
Ramkrishna’s senior at the Industrial Development Bank of India (IDBI), Ravi Narain was brought in along with her as part of former IDBI Director RH Patil’s team in 1992 when NSE was set up. Articulate and suave, Narain, a Wharton School MBA and Cambridge-trained economist, had a deep understanding of the financial sector. Under Patil, he is known to have played a key role in the growth of NSE in stock and debt markets as it took on the Bombay Stock Exchange (BSE). He took over from Patil as MD and CEO in 2001 and 11 years later, two years before his term was to end, decided to step down, much to everyone’s surprise. This allowed his protégé Ramkrishna to take charge. He, however, stayed on the NSE board in a non-executive position, as vice chairman and shareholder director. Both decisions—Ramkrishna’s appointment and his becoming vice chairman—were taken by a four-member selection committee, of which Narain himself was a member.
With Ramkrishna bringing in Subramanian, the power equations soon changed. The advisory consultant was allotted Narain’s former apartment at the top floor of NEAT House in Mumbai. Narain’s role was conspicuous by his silence. He spoke out against neither the way Subramanian was appointed and promoted nor Ramkrishna’s correspondence with an unknown person. The SEBI order said that despite having knowledge of “such grave irregularities and misconduct” and knowing that Ramkrishna “has not applied her independent judgment and was dependent on the guidance of an unknown person” while taking important decisions, Narain allowed her to exit through resignation and, at the board meeting held in December 2016, allowed her excess leave encashment of ₹ 1.54 crore.
His own position as shareholder director and public interest director (PID) had been questioned. In their book, Dalal and Basu write that Narain and Chandrasekhar Bhaskar Bhave, who were among the few with experience of capital market regulation and heading significant market infrastructure intermediaries, were sounded out by then Union Finance Minister P Chidambaram in 2004 for the SEBI chairman’s job. But both turned it down because it would entail sharp pay cuts and they had children studying abroad. “Over the next three years, Bhave at NSDL and Ravi at the NSE enjoyed huge pay increases on par with the best in the private sector. They also operated like heads of government institutions and exerted a lot of power over the regulator, while not being subject to any external scrutiny, vigilance, restrictions or even the RTI Act, like government entities.”
They also point out that NSE launched algo trading without SEBI’s specific approval when Narain was MD. When the algo scam broke, Narain was the non-executive vice chairman and on all important committees of the board—the audit committee, nominations and remuneration committee, stakeholder relationship committee as well as the risk assessment and review committee. He was also a director at many of the companies NSE had floated.
When Patil died in 2012, Narain, in an article, wrote: “I have learned a lot from this mild mannered and soft gentleman. Retain the courage of your conviction, struggle for what you believe is right, empower your people and give them space to grow, and at all times, invest in your institution. All of us at NSE and in the financial markets will miss him.” But, five years later, he quit after SEBI issued the first set of showcause notices, facing allegations that he had been a silent spectator to actions that may have been far from what was right. Besides Ramkrishna and Subramanian, he too has been questioned by CBI in the alleged abuse of the colocation facility by an NSE stockbroker.
The former chief regulatory officer and compliance officer at NSE had claimed before SEBI that there was no violation in Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations), or SECC regulations, 2012 in Subramanian’s appointment. He was fined ₹ 6 lakh for furnishing “incorrect and misleading submission”. The SEBI order noted that Narasimhan was aware of the powers delegated to Subramanian who attended board meetings and reported only to the MD and CEO and performed all functions of a KMP and not just a consultant. He, however, turned a blind eye to it. A KMP required his or her hiring to be cleared by NRC and the board. The SEBI order said Narasimhan had failed to exercise due diligence in the performance of his duties.
Narasimhan, who retired from NSE in 2018, submitted that various other departments including the HR department and the regulatory department lacked autonomy while dealing with their respective departments and were compelled to work only as per the direct instructions of the MD and CEO. This was seen as admission of failure in performing his duty as compliance officer. The order said he had failed to report to SEBI the non-compliance of SECC regulations.
Narain spoke out against neither Subramanian’s appointment nor Chitra Ramkrishna’s correspondence with an unknown person. SEBI said that, despite having knowledge, Narain allowed Ramkrishna to exit
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He began his career as a lecturer at a commerce degree college in Hyderabad and then moved into a long stint in the financial sector. After retiring from NSE, he went on to become the dean of the National Institute of Securities Markets (NISM), SEBI’s own educational initiative. He was still working there when SEBI was conducting its investigation and issued showcause notices to him and five others in December 2019.
The group president and company secretary of NSE, J Ravichandran was issued a showcause notice over allegations that he had ignored repeated concerns raised by the secretarial auditor on the appointment of Subramanian as GOO and advisor to MD without the approval of NRC and the board. Subramanian was appointed GOO at a grade on par with his. The same day, Ravichandran was promoted to “Group President—F&A, CSR and Corporate General Counsel in addition to being company secretary”, recognising the “value and experience, in terms of his concerted efforts and engagement with all our stakeholders” over a period of time.
Ravichandran submitted that he became aware of Subramanian’s re-designation when Ramkrishna issued a mail on March 2, 2015 to NSE employees stating that with effect from April 1, 2015, Subramanian would be GOO and would handle People Management, New Business, Corporate Communication, Marketing, Business Excellence, Research and Development, Pricing, Strategic Planning and Subsidiaries. The email did not contain information on the position of GOO, persons reporting to him, whether Subramanian would handle those functions in his advisory consultant capacity or in administrative or executive capacity and if he would continue to be a part-time consultant or become full-time or an employee after the re-designation. Further, he pointed out that it was the MD and CEO who was responsible for all matters pertaining to Subramanian, assisted by the HR department.
The SEBI order rejected the allegations against Ravichandran of suppression of irregularities on Subramanian’s appointment saying he had forwarded the concerns of the auditors to Ramkrishna and Chandrasekhar Mukherjee, the chief people officer at NSE. Mukherjee had said that Subramanian was not a KMP and his appointment did not require the approval of NRC and his engagement was within the administrative powers of the MD and CEO. It also concluded that the allegations did not hold because by the time the secretarial auditor rejected the reply of HR through its letter in October 2016, the issue was already placed and discussed by NRC in its meeting. When Ramkrishna stepped down, Ravichandran was given interim charge.