The phone tapping case in the National Stock Exchange (NSE) is taking curious turns. Ravi Narain, former managing director and chief executive officer (MD&CEO) of NSE, is the only one to have been granted bail. He is understood to be out on interim bail for two weeks since 30th September. Former MD&CEO Chitra Ramkrishna and Mumbai's former police commissioner Sanjay Pandey remain in judicial custody at Tihar jail, despite citing health issues.
While asking to issue summons to iSec Services Pvt Ltd, special CBI (central bureau of investigation) judge Sunena Sharma says, "As accused Mr Pandey and accused Ms Ramkrishna are in judicial custody in this case and are present through video conferencing from Tihar Jail, let copy of complaints and documents be supplied to their counsels. Let accused Mr Narain, who is present on interim bail, be also supplied with copy of complaint and other documents. Let summons be issued to iSec Services for the next date of hearing, i.e., 20 October 2022."
This order was issued on 1 October 2022. The court was hearing the matter to decide if the material available on record is sufficient to take cognizance in the complaint filed by the enforcement directorate (ED) against the four accused—iSec Services, Mr Narain, Ms Ramkrishna and Mr Pandey—under Section 45 read with Section 44 of Prevention of Money Laundering Act (PMLA).
"In the light of contents of the complaint, statement of accused persons and witnesses recorded under Section 50 PMLA, and the documents filed along with the complaints, I find the material sufficient to take cognizance. Accordingly, I take cognizance of the offence of money laundering punishable under Section 4 of PMLA against all four accused persons," the special CBI judge says.
During the investigation, ED arrested Mr Pandey on 20 July 2022, Ms Ramkrishna on 14 July 2022 and Mr Narain was arrested on 7 September 2022. However, on 30 September 2022, the special CBI court granted interim bail to Mr Narain for two weeks.
Ms Ramkrishna was granted statutory bail in the case filed by CBI in NSE Colo (co-location) scam. Last week, the Delhi High Court sought the stand of ED on her bail plea in the money laundering case related to phone tapping at NSE.
Following directions from the Union ministry of home affairs (MHA), the CBI had registered a new case against NSE former chiefs Ms Ramkrishna and Mr Narain, as well as Mumbai's retired police commissioner (CP) Mr Pandey. The case has been registered for allegedly tapping the phones of NSE employees between 2009 and 2017.
As per the enforcement case information report (ECIR) of ED, "...it was he (Mr Narain) who introduced accused Sanjay Pandey of iSec Services Pvt Ltd to accused Chitra Ramkrishna... Abusing their official positions, both accused Ms Ramkrishna and Mr Narain decided on interception, monitoring and recording of telephone calls which was done under the garb of periodic study of cyber vulnerabilities."
"Mr Narain was instrumental in according approval for payment of the proceeds of crime which would not have been acquired by iSec Services without the said approval. Subsequent to the approvals granted by him as MD, a payment of Rs1,82,24,599 was made by NSE to iSec Services for this work out of the total payment of Rs4,54,38,162. The total amount of Rs4,54,38,162, including the sum of Rs1,82,24,599 paid under his tenure as MD, NSE, represents the proceeds of crime in this case which were acquired by iSec Services from NSE and which were projected as fees for non-existent periodic study of cyber vulnerabilities of NSE. Thus, accused Mr Narain is guilty of offence of money laundering as defined in Section 3 of PMLA, 2002, as he was directly or indirectly indulging in or knowingly assisting in and was actually involved in all or any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property," the ECIR says.
In 2009, iSec Services set up a call monitoring system on the seventh floor of NSE. Until 2012, it used the set up provided by Comtel to NSE to monitor or intercept the calls. After that, NSE purchased a call monitoring set up from iSec Services which was installed in the upper basement of the NSE building.
As per ED, "NSE was provided with four primary rate interface (PRI) lines, each line having a capacity of 30 telephone connections by MTNL which originated from MTNL and terminated at EPABX of NSE. During the period from 1 January 2009 to 13 February 2017, iSec Services was monitoring or intercepting the calls of these four PRI lines used by employees of NSE and submitted copies of transcript of conversations to the top management of NSE."
ED says, "The telephone monitoring was carried out by NSE through iSec Services without taking permission of the competent authority as required under Section 5 of the Indian Telegraph Act as well as without the knowledge or consent of the employees. These PRI lines were allegedly intercepted before their termination on EPABX of NSE. The telephone numbers to be monitored were identified by accused Ms Ramkrishna, NSE Mumbai and conveyed to Ravi Varanasi, vice president of NSE and he in turn provided the same to Mahesh Haldipur, head (premises) (at NSE) who gave it to iSec Services. The identified officers and departments included market watch, market surveillance, risk management having access to critical online information and access to online real time data bases."
"…from 2009 to 2017, top officials of NSE, abusing their official position and iSec Services had conspired together to illegally intercept phone calls of employees of NSE in the guise of periodic study of cyber vulnerabilities of NSE, breaching the confidentiality and privacy of the employees of NSE and had caused wrongful gain of Rs4,54,38,162 to iSec Services as payment for this task and corresponding wrongful loss to NSE," ED further says.
"After acquiring the same, the said proceeds of crime were used by iSec Services for its business and creating of assets in its name. Thus iSec Services is guilty of offence of money laundering as defined in Section 3 of the PMLA, 2002, as it was directly or indirectly indulging in and was actually involved in all or any process or activity connected with the proceeds of crime, including its concealment, possession, acquisition or used and projecting or claiming it as untainted property," the ECIR says.
Mr Narain was the MD and CEO of NSE from April 1994 to 31 March 2013. Thereafter, he was appointed as vice–chairman in non-executive category on the NSE board on 1 April 2013 and remained so till 1 June 2017, when he resigned from his post. Ms Ramkrishna was the MD&CEO of the NSE from April 2013 before she was asked by the board to resign on 2 December 2016.
In 2001, Mr Pandey set up iSec Services when he was not in the service. The 1986-batch officer from the Indian Police Service (IPS) cadre, who studied at IIT-Kanpur and Harvard University, is understood to have set up the company after he resigned from service. However, his resignation was not accepted by the Maharashtra government, and he rejoined the police force. Mr Pandey quit the company in 2006 when he returned to the police force and his mother and son became directors of iSec Services.
However, the ECIR says, "Even after he (accused Mr Pandey) resigned from directorship of the company, he was having advisory role in this company and remained involved in discussions with NSE on behalf of iSec Services at various stages, and the evidence available reveals that he had also conducted meetings with officials of NSE on behalf of iSec Services."
"All the instructions regarding proposals dated 22 January 2016, 9 February 2015, 7 February 2014, 27 June 2013 and 5 February 2013 under which telephone calls of NSE employees were being monitored by iSec Services were received by the employees of iSec Services mainly from Mr Pandey through mail ID
[email protected] as well as his personal ID s*****@isec.co.in. Accused Mr Pandey used to always interact with NSE officials for all related matters," the ECIR filed by ED says.
Last week, the Delhi High Court granted statutory bail to Ms Ramkrishna and Anand Subramanian, ex-group operating officer of NSE, in the Colo scam case being probed by the CBI.
