Former NSE chief Ravi Narain steps down from boards of two listed firms

Ravi Narain was an independent director on the board of PI Industries and Escorts. Both the two companies and made a stock exchange disclosure stating that Narain had resigned with immediate effect

Ravi Narain, former managing director (MD) and chief executive officer (CEO) of the National Stock Exchange (NSE), stepped down from the board of automobile company Escorts and agro chemical company PI Industries, on Wednesday. 

Narain was an independent director on the board of these two firms. Both Escorts and PI Industries made a stock exchange disclosure stating that Narain had resigned with immediate effect. 

The move comes a day after the markets regulator Securities and Exchange Board of India (Sebi) prohibited Narain from associating with a listed company or market infrastructure institution (MII), or any other market intermediary — for a period of five years. 

Following his resignation from Escorts and PI, Narain is no longer associated with any listed firm. Previously, he had served on the boards of other listed companies, including Indostar Capital and Crompton Greaves.  The regulator has also asked Narain to disgorge 25 per cent of his salary drawn during FY11 to FY13. ‘Disgorgement’ is a term used for returning ill-gotten gains. 

An email sent to Narain seeking comment went unanswered. Sebi has prohibited Narain’s successor at the NSE — Chitra Ramkrishna — from associating with a listed company or MII for a period of five years, too. Ramkrishna, however, isn’t associated with any board of a listed firm at present. Ramkrishna has been directed to disgorge 25 per cent of her salary for FY13-14. 

Narain’s gross remuneration between FY11 and FY13 stood at Rs 24.3 crore, while that for Ramkrishna was Rs 4.5 crore in FY14, according to the NSE’s annual reports. 

Sebi has asked the NSE to disgorge Rs 625 crore, along with an interest of 12 per cent per annum since 2014, for lapses at its co-location (colo) facility that allowed unfair access to certain brokers. The regulator also barred the exchange for a period of six months from accessing the securities market. 

In a statement on Wednesday, the bourse said Sebi’s orders do not affect its functioning as a recognised stock exchange. 

“Normal trading on the NSE will continue from Thursday, May 2, 2019 in all segments. Wednesday, May 1 is a trading holiday on account of May Day,” the exchange said. 

Sebi, in its order, stated that the trading architecture at NSE’s colo facility between June 2010 and March 2014 — when Narain and Ramkrishna were at the helm — was prone to manipulation, thus allowing certain brokers unfair access to trading data feeds.