NSE scam: Need to tighten corporate governance in India

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An alleged e-mail between Chitra Ramakrishna, former MD and CEO of the National Stock Exchange (NSE) and his 'yogi' in the Himalayas, and an 'arbitrary' pay hike to operating officer Anand Subramaniam, have come to light.

The explosive information provided by SEBI last week about the Chitra Ramakrishna, Subramaniam and the mysterious yogi in its 150-page final order on the NSE co-location scam has raised questions about corporate governance. If such a big scam is taking place in the country's largest stock exchange then where is the talk of small companies. With the failure of corporate governance, it is time to reconsider measures to curb malpractice in corporate structures and companies.

It is a serious incident that during the year 2013-2014, Chitra Ramakrishna was giving information about RJR of NSE to an unknown Yogi Baba through an e-mail and managing the stock exchange at his behest. The verdict comes almost six years after Chitra Ramakrishna was expelled from the NSE.

Instead of informing the director about the scam in time, SEBI has satisfied NSE by imposing financial penalties and slaps. However, this is a serious crime and needs to be thoroughly investigated to prevent such scams in the future. The possibility of involvement of other members of the then board in the NSE scam cannot be ruled out.

Anand Subramaniam's appointment to a high position on the stock exchange with a salary package of crores of rupees and subsequent hike ... salary increase, why the board members of NSE did not object to the facilities and did not inform the director. The serious shortcomings of governance at the NSE indicate how malpractice can occur even in so-called non-promoter-run commercially run organizations. Therefore, the time has come to appoint an executive chairman for such organizations so that the responsibilities between the chairman and the CEO can be rebalanced. A corporate structure where power is distributed rather than centralized.

The NSE scam should seek the help of various investigating agencies, audit firms, forensic reports and cyber experts in view of serious governance violations. A fresh investigation can detect irregularities that were previously out of sight and help close any loopholes that remain. The scam should not be mistaken for a minor incident as it has fallen on the country's largest stock exchange where thousands of companies are listed and involving the invaluable capital of small investors. If the stock exchange has failed to stop the scandal that is going on under its feet, if there is a serious violation of corporate governance, how will it be able to operate and monitor the companies listed there? Strict investigation is required in this incident so that in future no CEO will be afraid of committing such malpractice ...

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