ED arrests former NSE boss Ravi Narain in illegal phone tapping case

Mumbai: The Enforcement Directorate late on Tuesday night arrested Ravi Narain, former managing director and CEO of NSE in case of illegal phone tapping at the exchange, said ED official.

He will be produced before a special court tomorrow for custody, the official added.

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 being probed by the investigative agency which is probing alleged violation of money laundering norms in the colocation scam. This is the first time Narain has been arrested when the irregularities at NSE had been a matter of investigation for five years now.

Pandey and Chitra Ramkrishna former NSE chief were arrested later in July this year in the illegal phone tapping case. Ramkrishna was first arrested by the Central Bureau of Investigation (CBI) in March this year in the colocation case.

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 investigative 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.

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 ₹4.45 crore. The transcripts were provided to senior officials of the NSE.

ED in court during bail hearings of Pandey said it is trying to decipher the entire money trail and to 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.