VR Narasimhan, one of the former NSE Board members penalised by SEBI in the Chitra Ramkrishna case, happens to be the Dean of SEBI's own educational initiative, the National Institute of Securities Markets (NISM).

In the case of the irregular appointment of Anand Subramaniam and sharing of confidential company information by the ex NSE MD & CEO, Chitra Ramkrishna, VR Narasimhan was a co-accused. Narasimhan was the chief regulatory officer of NSE who helped cover up the offenses that SEBI has now uncovered and penalised Chitra for.

Narasimhan was also found guilty of the following offences, as detailed in SEBI's order: Making misleading and incorrect statements to SEBI, suppressing irregularities with NSE, failing to perform his duty as a regulatory officer.

It is ironic that the person who covered up regulatory offences of NSE, and its then MD & CEO, is now training young minds on the subjects of, Regulatory Studies, Supervision, and Corporate Governance. During Narasimhan's time in NSE, regulations were flouted, and corporate governance at NSE was at its nadir.

The role of a regulatory officer not only demands subject matter expertise but also high standards of ethics and morals. It seems unfair to the nation and the capital market ecosystem that a person who has been found guilty of a grievous offence, that is almost akin to betraying both his profession and SEBI, holds an apex position in an educational institute founded by the same regulator.

SEBI's inaction on the Office of the Dean even while Narasimhan was under investigation and now proven guilty

SEBI's enquiry of the Chitra Ramakrishna case has been going on since 2016. Narasimhan's role in the case was already under scrutiny because as a chief regulatory officer he was pivotal to communications between the regulator and NSE. Narasimhan was also an NSE Board member who was supposed to take suo-moto cognizance of any irregularity within NSE and report them to SEBI. Narasimhan retired from NSE in 2018 while the enquiry on Chitra's case was in process.

After retirement, Narasimhan was appointed as the Dean & Professor of Practice - School for Regulatory Studies and Supervision (SRSS) & School for Corporate Governance (SCG) at NISM.

By the second half of 2020, SEBI had conducted its investigation and issued show-cause notices to Chitra and her co-accused, including Narasimhan. Thus, even during the time of investigation and issuance of notice, Narasimhan was working in a set-up founded by SEBI. For the entire tenure of the investigation and cross-examination, Narasimhan's throne at NISM remained unshaken.

Even now, when SEBI has already concluded that Narasimhan committed serious offences against the regulator itself, he still holds a prestigious office at the benefaction of SEBI.

What kind of a message does the regulator send to the Indian and global financial community?

The penalty levied by SEBI on Narasimhan is just ₹6 lakh, while he was earning a salary of ₹1.5 crore at NSE in 2013. His position at NISM, even now, remains unscathed. Narasimhan's role as a CRO was crucial to clean corporate governance at NSE. And his failure to report irregularities and misleading of SEBI resulted in offenders like Chitra and NSE get away with serious law-breaking. If Narasimhan had performed honestly as a CRO, the Chitra fiasco could have been contained before blowing out of proportion.

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