Former bureaucrat Ashok Chawla resigned as chairman of the National Stock Exchange on Friday, a few house after the centre green-lit the CBI to prosecute him in connection to the Aircel-Maxis case.
In a statement late Friday, the bourse said Chawla has resigned as “Public Interest Director/ Chairman of the Board of Directors of the National Stock Exchange of India Ltd with immediate effect in light of recent legal developments”.
Chawla’s entry into NSE
Chawla was hired at the exchange in 2016 to clean house in the wake of an ongoing investigation by Securities and Exchange Board of India (SEBI). The market regulator was probing the alleged lapses in high-frequency trading (HFT) offered through NSE’s co-location trading facility and whether certain brokers had unfairly faster access to it.
The case, also known as the NSE co-location case, caused several board members of the bourse to resign, including Chitra Ramakrishna, the then managing director, and Ravi Narain, the then vice chairman.
What has the CBI been up to?
The Central Bureau of Investigation (CBI) had charge-sheeted him on July 19, 2018, but could not prosecute him without a sanction from the centre. As per revised rules, A-class government officials covering positions of joint secretary and above cannot be prosecuted without approval of the Centre, regardless of whether they have are retired or in active service.
Soon after, SEBI began looking into Chawla’s involvement in the Aircel-Maxis case, deliberating on whether he should be allowed to continue holding the position at the bourse.
On Friday, the nodal investigation agency informed a Delhi court bench headed by Special Judge O.P. Sahni it would go forward with prosecuting five bureaucrats, with the centre’s approval, for their alleged involvement in the Aircel-Maxis deal.
The case so far
Hearing on the Aircel-Maxis case began in July last year. Congress leader and former finance minister P. Chidambaram and his son Karti stand accused of being involved in the case which created ripples across the political and judicial circuit last year.
Judge Sahni, in a hearing last November, had extended the interim protection for Chidambaram and Karti to avoid arrest till February 1, 2019. The court had further granted the CBI two months’ time for obtaining the sanction from authorities.
The Aircel-Maxis case filed by the CBI and the Enforcement Directorate (ED) mentions 12 public servants and six companies as accused for alleged irregularities and criminal conspiracy, under section 120-B read with section 7, 12, 13(2) read with 13(1) D of the Prevention of Corruption Act.
Besides Chawla, the CBI’s chargesheet includes serving and former bureaucrats namely, Ashok Jha (then secretary of economic affairs), Kumar Sanjay Krishna (former joint secretary in finance ministry), Dipak Kumar Singh (then director in finance ministry), and Ram Sharan (then under-secretary in finance ministry).
The five of them were members of the Foreign Investment Promotion Board (FIPB) at the time. CBI had found discrepancies while following two money trails in connection with the FIPB clearance that was given to a firm for investment in Aircel.
The chargesheet had alleged that Chidambaram had sanctioned the sale of telecom Aircel to Malaysia’s Maxis without following due process in 2006. Karti Chidambaram, 46, was arrested last February on charges of money-laundering in the same case but was soon released on bail.
Chidambaram, one of the top leaders of the opposition, claims that the CBI was coerced and pressured into filing the chargesheet, just hours ahead of a no-trust vote against Prime Minister Narendra Modi. He further asserted that all investment approvals granted during his tenure were above board.
Chawla and NSE
Chawla, who had served as finance secretary in the past, took over as the chairman of the exchange in 2016. He has previously held high ranking portfolios including civil aviation secretary, chairperson of the Competition Commission of India (CCI) and Yes Bank chairman.
Meanwhile, the NSE board has eight other members, including Managing Director and CEO Vikram Limaye. There are three shareholder directors – Abhay Havaldar, Prakash Parthasarathy and and Sunita Sharma. The four public interest directors are Dinesh Kanabar, Naved Masood, T V Mohandas Pai and Dharmistha Raval.
Prarthana Mitra is a staff writer at Qrius.