Did Ravi Narain meet key player of co-lo scam?

Ravi Narain, the former MD & CEO of NSE, feigned ignorance when SEBI asked him about his meeting with representative of Delhi-based broker OPG Securities, which has now been established as a key player in the co-location scam who was given preferential treatment by the exchange. Narain is among those NSE employees who were served another show cause notices by SEBI on July 3 with regard to the scam.

When confronted by SEBI about his meeting with Aman Kokrady, the software architect and developer for OPG, Narain was evasive and simply said “he did not recall meeting OPG Securities”. Also, SEBI asked Narain about his email exchange with NSE’s Nanda Kumar R, wherein he authorised the exchange employee to informally provide Application Programming Interface (API) to rival exchange BSE and also collect the same from them. Simply put, API is the language by which two computers can ‘talk’ to each other.

“Should I meet and handover the API specs (specifications) to (Bala) in a pen drive (in informal manner and neutral place),” Kumar wrote in an email to Narain seeking his advise. Narain replied in “Yes” to the mail. But when SEBI asked him the details of the email exchange Narain said, “I do not recall the context of this e-mail.”

In another e-mail that SEBI used to confront Narain, Kokrady wrote to one of NSE’s tech team employees that “Mr Narain was with us a week before and this is what we discussed: Production roll-out calendar should be planned and well-communicated.”

Kokrady, who has been accused by SEBI of consistently logging in first on the NSE servers which gave him advantage, is seen dictating the terms in e-mails.

Micro-second advantage

To a question from SEBI on what were the advantages of early login (in TCP/IP/TBT), NSE’s former technology chief Ravi Apte said, “Yes, there could be advantage of a few micro seconds.” SEBI has accused the exchange of providing this early access to brokers, mainly OPG Securities, into its trading systems. A few micro-seconds early access could make ‘millions worth of difference’ for algo traders in equity markets.

Apte further told SEBI that he had facilitated transfer of data to Ajay Shah, a former consultant to Finance Ministry, who too has come under the SEBI scanner in the scam, at the request Narain and Chitra Ramkrishna. “Transfer of data to him related to equity orders and trades for academic research at IGIDR. Data pertained to orders and trades sans customer information. I was under the impression that an appropriate confidential agreement was signed with him by NSE,” Apte said.

When asked by SEBI if she knew Shah and the rationale for the NSE to share data with him prior to 2012 when there was no such contract to do so, Ramkrishna said, “I may have met him infrequently. He was known to the NSE as a researcher and academician. I am not able to recollect any arrangement for sharing data with Ajay Shah in his personal capacity. Research (Mohanty) and Ravi Varanasi team may be able to provide the necessary details, if any.”

On Ramkrishna’s statement that respective CTOs (chief technology officers) and their teams were responsible to ensure equal and fair access to members, Apte said it was only “partially true as it was joint responsibility of business team also”. According to Apte, starting with system advisory committee and ‘board-level oversight’, reviews were made and approvals obtained. “Regular management meetings were held and details provided to MD/DMD.”

One query, different replies

Ramkrishna had to quit in 2016 following criticism for appointment of Anand Subramanian as the NSE’s chief strategy advisor and group operating officer. When confronted by SEBI on Subramanian’s appointment, Ramkrishna said, “He was identified by the HR consultant. Interviews were done by HR and myself. Subsequently, the candidate also met Narain and Mathur (Chairman). I knew him through his wife Sunitha Anand.”

On the same question Narain replied, “No, I did not have any role in the appointment of Subramanian.”