Two Governance Controversies That May Have Prompted Chitra Ramkrishna’s Resignation 

In a sudden and shocking development Chitra Ramkrishna, the managing director and chief executive officer of the National Stock Exchange, the country’s largest stock exchange, has stepped down almost 17 months before her term comes to an end.

The NSE media statement says Ramkrishna “tendered her resignation due to personal reasons and expressed her desire to step down with immediate effect”.

But a person close to the developments spoke to BloombergQuint and said her resignation is the fallout of two governance-related issues at NSE.

The Co-Location Controversy

The first reason may be a loss of confidence in the NSE top management due to a co-location controversy that has dogged the exchange for several months now, the person quoted above said.

The country’s largest stock exchange has faced allegations of preferential treatment to some member/brokers, leading to an investigation by market regulator Securities and Exchange Board of India (SEBI). Earlier this year, SEBI reportedly asked NSE to ensure discontinuation of any such preferential treatment and to conduct an internal investigation and fix responsibility for wrongdoings if any. NSE has commissioned a forensic audit, the results of which are expected in about 15 days.

Ramkrishna’s response to the complaints and investigations was seen as uncooperative, said the person quoted above.

The Subramanian Anand Appointment

The second reason she may have offered to step down is due to a controversy surrounding a high-ranking official at NSE, Subramanian Anand, who till recently was the group operating officer but in a consulting position. The person quoted above said Anand’s appointment was said to be done in an opaque manner and without following proper procedure.

Complaints regarding this appointment reached the board prompting it to examine the appointment process vis a vis what’s laid down in company law regarding appointment of key managerial personnel. It’s not clear if the board completed its inquiry but Anand resigned in October, 2016.

The Transition

These two events may have led to the perception of a lack of confidence in the current leadership and may have prompted Ramkrishna to offer her resignation, which she did earlier this week.

The NSE board accepted her resignation on Friday and appointed Group President J Ravichandran “to hold charge of the office of CEO with immediate effect”.

Ramkrishna took over as MD and CEO of NSE with effect from April 1, 2013 for a period of five years. She has been with the exchange since its inception in 1992.

NSE is in an advanced stage of filing its draft prospectus for an initial public offering (IPO).

In response to BloombergQuint’s queries the NSE spokesperson said via an email response, “Please read the press release which clearly mentions that reasons are personal. Also the board has actually noted her contributions to the organisations. The same is mentioned there too. Also Mr Anand’s resignation has nothing to do with the board. He foreclosed his contract. Regarding other issues please note that NSE does not want to comment on matters related to the regulator, government etc. Rest all seems to be your conjectures”.

BloombergQuint has not been able to reach either Chitra Ramkrishna and Subramanian Anand for their comments.