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EconomyThe Ravi Narain, Chitra Ramkrishna, Sanjay Pandey ring of money-laundering, phone-tapping

The Ravi Narain, Chitra Ramkrishna, Sanjay Pandey ring of money-laundering, phone-tapping

The Enforcement Directorate (ED) Ravi Narain, the former Managing Director and Chief Executive Officer (MD and CEO) of the National Stock Exchange of India Limited (NSE), today in connection with a money laundering case related to alleged illegal phone tapping and snooping of NSE employees. The ED will produce Narain before a special court on Wednesday for custody.

The ED had registered and Enforcement Case Information Report (ECIR) in July against former Mumbai Police Commissioner Sanjay Pandey and former heads of the NSE for allegedly tapping the phones of employees between 2009 and 2017.

This is the second case that the financial investigative agency is probing, the other one being an alleged violation of money laundering norms in the colocation scam.

This is the first time Narain has been when the irregularities at NSE had been a matter of investigation for 5 years now.

The ED had Pandey and Chitra Ramkrishna, another former NSE chief, later in July in the illegal phone tapping case. It was the Central Bureau of Investigation (CBI) that had first arrested Ramkrishna in March this year in the colocation case.

A Delhi court had dismissed the bail application of Ramkrishna last week in a money laundering case related to the alleged illegal phone tapping and snooping of NSE employees. Special Judge Sunena Sharma denied the relief, saying the stage was not set to allow the bail.

During the hearing, the ED had opposed the bail plea, saying the investigation was ongoing in the matter and she was directly or indirectly indulging in the crime.

The Ravi Narain, Chitra Ramkrishna, Sanjay Pandey nexus

The ED's Special Public Prosecutor NK Matta had told the court that from 2009 to 2017, former NSE head Narain, Ramkrishna, Executive Vice President Ravi Varanasi and Head (Premises) Mahesh Haldipur and others conspired to cheat NSE and its employees and for the said purpose iSEC Services Pvt Ltd was engaged for illegal interception of phone calls of employees of NSE in the guise of Periodic Study of Cyber vulnerabilities of NSE.

Narain, the former NSE head, and Pandey, who headed Mumbai Police in the past, and Ramkrishna have been accused of illegally tapping the phone calls of NSE employees between 2009 and 2017 via Pandey's firm iSEC securities.

Incorporated by Pandey in 2001, iSec Services was among many IT companies that conducted security audits at NSE between 2010 and 2015, when the co-location scam allegedly took place. The agencies have been investigating the role of the security auditor as it should have been able to detect the breaches in the NSE system when the scam occurred.

In the co-location scam, some brokers got faster access to the NSE systems, data and trading at the cost of the broader market. “In furtherance to the conspiracy, the said private company was allegedly engaged in the guise of conducting ‘periodic study of cyber vulnerabilities‘ at the NSE. It was further alleged that top officials of the NSE issued agreement/work orders in favour of said private company and illegally intercepted phone calls of employees by installing machines, in contravention of provisions under the Indian Telegraph Act," CBI had said in a FIR filed in July this year.

The ED and CBI have alleged that interception was done without employees’ consent, and transcripts of the calls were recorded by ISec for a fee of Rs 4.45 crore. The transcripts were provided to senior officials of the NSE.

The ED said in court during bail hearings of Pandey that it was trying to decipher the money trail and further determine his role as well as that of various other persons who facilitated the offence of money laundering and to determine the entire modus operandi employed for the generation of proceeds of crime in the project titled ‘Periodic Study of Vulnerabilities’ of NSE awarded to Pandey’s firm.

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