Dramatic fall of an institution builder

Author: Nishu February 20, 2022

Dramatic fall of an institution builder


The former CEO, a member of the core team that built the NSE, has come under criticism for decisions taken under the ‘guidance’ of an unknown yogi.

The former CEO, a member of the core team that built the NSE, has come under criticism for decisions taken under the ‘guidance’ of an unknown yogi.

It was the summer of 1992. Less than a year after India began its economic liberalization when the Harshad Mehta securities scam surfaced in April, it showed the extent to which the Bombay Stock Exchange’s regulatory system had been weakened. A hardened government decided it was time to set up a technology-driven, modern stock exchange that would put transparency at the front and center of its operations.

For this, it dusted off a report prepared last year by a committee headed by MJ Ferwani and selected veteran banker SS Nadkarni to lead the project. Nadkarni in turn hired financial industry expert RH Patil and set out to put together a core team. The Ferwani Committee stressed the critical need for an active and transparent debt securities market, among its many recommendations, a young chartered accountant working on the Bonds desk of the Industrial Development Bank of India (IDBI) was included in a group of five- Financial Chosen for their expertise in various aspects of the markets.

Chitra Ramakrishna, a debt market expert in her early 30s, would soon prove her mettle as the team building the framework and commissioning the new exchange was on the ground. In just nine months after the design for the trading platform was finalized, a wholesale debt market was activated on the National Stock Exchange in June 1994 and NSE would soon rapidly expand its product offerings and trading capabilities.

“Chitra’s contribution in those early days was knowledge and understanding of the debt market, among other aspects,” said a former NSE colleague on condition of anonymity.

Two decades later, in April 2013, Ms. Ramakrishna was appointed Managing Director and Chief Executive Officer of the NSE, placing her in the rare rank of female CEO, and one of the world’s largest exchanges by trading volume. .

Within months of his nomination for the top job, however, he picked Anand Subramaniam, an outsider to the industry, for a consulting role as his chief strategic advisor, with a starting salary of ₹1.68 crore. .

The former aide said, “Anand Subramaniam’s choice is difficult to explain and shows that his problem with trusting people in general led to the failure of the decision.” The former coworker said, “While Chitra may have been very attractive when she wanted to, she had poor interpersonal skills and could be aloof with her colleagues.”

The 190-page order by the Securities and Exchange Board of India earlier this month said that Mr Subramaniam’s appointment and subsequent promotion as group operating officer, along with several other actions that Ms Ramakrishna took in his three-and-a-half years, said was done during Half a year’s tenure as CEO, until his sudden departure in December 2016, was all ‘guided’ by an unknown yogi who reportedly lived in the Himalayas.

SEBI orders a picture of a powerful woman thrilled to be her ‘spiritual’ guide. While communicating via e-mail, Ms Ramakrishna is said to have shared confidential corporate information including NSE’s five-year projections and even the board meeting agenda with this unidentified person, in the order. Forensic audit report submitted by & Y was cited. NSE in 2018

SEBI whole-time member Ananth Barua, in his order, noted that NSE in its communication to the regulator, citing the E&Y report, said that the unidentified ‘guide’ was none other than Mr. Subramaniam. The exchange’s legal advisors even consulted a human psychology expert, who said Ms. Ramakrishna was “exploited” by Mr. Subramaniam by identifying an unknown ‘guide’, while the advice given by the ‘guide’ was also a beneficiary. ‘ to the NSE official. Mr Baruah of SEBI, however, decided that there was no “conclusive evidence” to establish that Mr Subramaniam was indeed a ‘guide’.

blind spot

That the unidentified ‘guide’ was apparently Ms. Ramakrishna’s blind spot emerges from her requests to the regulator as well as her direct e-mail exchanges with this person. While she is said to have said that she did not know the person’s location coordinates and had only met him “on occasions in holy places”, there are excerpts from e-mails where the mystery spiritual master took a particular day. but comments on her presence, and in another asks Ms. Ramakrishna to plan a meeting with her in the Seychelles, where she can ‘calm down’.

Interestingly, Seychelles, an offshore tax haven, did not have an information-sharing treaty with India at that time.

Apart from the mystery e-mail ‘guide’, Mr. Subramaniam’s influence as an advisor to Ms. Ramakrishna is unclear in terms of the impact on the operation of the exchange.

However, he made the already retired Ms. Ramakrishna even more difficult to reach.

“One of the early things they did was to designate one of the three elevators in the building specifically for MD and the other on the 7th floor,” the former colleague said.

Another former colleague, who had knowledge of how the exchange’s core trading and clearing and settlement systems are run, insists that Mr. Subramaniam, however, had no clue about the day-to-day operations of Ms. Ramakrishna’s NSE. There was no apparent impact on management.

“There was always pressure in meetings with marketing teams for insight into the various highly sensitive data that a handful of people had to operate in order to enable them to target large investors when competing for an IPO business,” said this former colleague. saw. “His [Ms. Ramkrishna’s] The typical way to signal that there can be no compromise on the integrity of the data would be to get up and leave the meeting,” said the ex-NSE employee.

zero interference

“There was complete freedom, there was zero interference and we were projected as adults responsible for our actions,” said the one-time exchange employee, referring to Ms Ramakrishna’s tenure. “The baseline was the result and the exchange’s growth and operational strength is a testament to the leadership it had right from the start,” the former employee said. The SEBI order as well as the NSE’s actions in dealing with the aftermath of Ms. Ramakrishna’s departure reflect the once-powerful CEO, who derailed in his decision-making relating to key personnel decisions by seeking guidance from an unknown yogi. However, the damage caused to the stock markets and retail investors by his decisions remains a matter of conjecture.

“Its ability and ability to manage the complexity of the exchange and keep NSE at the cutting edge has been lost in the dust raised by all the recent revelations,” said the former associate. “No matter how much this story ends, no one can take away her role in building this incredible institution from scratch,” said a one-time colleague.

20 February, 2022, 12:22 pm

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