The Enforcement Directorate arrested Ravi Narain, former MD & CEO of the National Stock Exchange (NSE), in a money laundering case, in what marks a dramatic turn in investigations into the chains of the operations of the bourse by its former executives and a group of traders.
Narain is being investigated in the NSE co-location scam and the alleged illegal phone tapping case in which former bourse head Chitra Ramakrishnan, former group operating officer Anand Subramanian, and former Mumbai police commissioner Sanjay Pandey have already been arrested. Co-location scam essentially refers to the collusion between the then NSE administration and a group of brokers who were allowed to set up their operations inside the premises of the bourse, giving them undue advantage in executing trades. While co-location per se is not seen as improper and has been a feature of many stock exchanges internationally, the one involving the NSE resulted in undue favour to a group of brokers in terms of early flow of data.
His arrest is a big downturn in the career of Ravi Narain, once a celebrated executive in the financial sector. The agency had arrested Chitra for her involvement in extending benefits to some brokers and also using the alleged phone tapping against them.
Pandey was arrested after he was repeatedly questioned about his role in the scam soon after his retirement. He was confronted with alleged payments of more than £1.2 million received from the NSE by a firm iSec Services linked to him in connection with illegal phone tapping of some NSE officials and clients.
