CBI examines NSE’s former MD Ravi Narain in ‘co-location’ case

Look-out circulars issued against him, Anand Subramanian, adviser to the firm

February 20, 2022 11:27 pm | Updated February 21, 2022 11:28 am IST - NEW DELHI

NSE ex-MD Ravi Narain. File

NSE ex-MD Ravi Narain. File | Photo Credit: The Hindu

The Central Bureau of Investigation (CBI) has recorded the statement of former National Stock Exchange (NSE) managing director Ravi Narain in connection with the alleged abuse of server architecture of the Exchange to provide preferential access to a private company to the data ahead of other brokers.

In the same case, registered in May 2018, the agency had examined former NSE managing director Chitra Ramkrishna this past week. The CBI has already issued look-out circulars against her, Mr. Narain and Anand Subramanian, the former group operating officer and advisor to the exchange.

“Mr. Narain was examined by a CBI team on Saturday. He is currently in Delhi,” said an agency official. Mr. Narain was the NSE’s managing director and chief executive officer from April 1994 till March 31, 2013. He was appointed as vice-chairman in the non-executive category on the Exchange’s board with effect from April 01, 2013, and remained so till June 01, 2017 when he resigned from his post.

The CBI is likely to also record the statement of Mr. Subramanian. Earlier, the Income-Tax Department had conducted searches on his premises and that of Ms. Ramkrishna in Chennai and Mumbai.

On February 11, the Security and Exchange Board of India (SEBI) had levied penalties on her, NSE and others for violating rules while appointing Mr. Subramanian as chief strategic advisor and then re-designating him as the group operating officer and advisor to the then managing director of the exchange.

The CBI case is against stock-broker OPG Securities, its owner Sanjay Gupta and others, including unknown SEBI and NSE officials, who have been accused of being involved in a conspiracy, wherein an algorithmic trading software package named “Chanakya” was used by the company to get market feeds from the NSE server ahead of others.

The software, developed by accused Ajay Narottam Shah using the NSE trade data gathered by him in 2005-06 on the pretext of research work, was sold to OPG Securities and some other brokers, as alleged.

According to the First Information Report, Mr. Gupta and his brother-in-law, Aman Kakrady, were into illegal trading in China, Hong Kong, Singapore, Dubai and Ghana through OPG Securities. During 2010-12, he gained illegal access to the NSE’s server architecture in conspiracy with the Exchange officials using “co-location” facility. It enabled the company to log in first to the server ahead of other brokers.

As it turned out, a load balancer -- a device that facilitates distribution of network traffic across servers, – was installed by the NSE in 2012. While servers of all the other brokers were linked to the primary servers, Mr. Gupta got access to the back-up server. As the back-up server had “zero load”, his company got expeditious access, as alleged.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.