Sebi fines NSE for extra pay to former MDs

MUMBAI: Markets regulator Sebi has imposed a Rs 50-lakh penalty on the NSE for changing rules related to leave encashment for senior management without Sebi’s approval to pay extra to its former MDs, Chitra Ramakrishna and Ravi Narain. Sebi said that such a move on the part of the NSE led to non-compliance with the provisions of applicable rules, though the NSE had reversed the move and recovered the amount paid to the two former executives.
The NSE, “being the leading regulated stock exchange in India, should have set higher standards of compliance, which is found missing in the present case”, Sebi said in its order. “Further, the material brought on record shows that the failure of taking prior approval from Sebi before making a change in its policy, which was approved by the compensation committee/NSE board of November 26, 2012, may be a single instance but it has led to violation on repeated instances,” it noted.
The instances Sebi pointed out related to accumulated ordinary leave by Narain and Ramkrishna over and above the limit of 360 days after Narain’s retirement and Ramakrishna’s resignation. Sebi had conducted an investigation after it received a letter from finance ministry that mentioned these two NSE executives were paid above their entitlements. For Ramakrishna, the extra amount paid was Rs 1.5 crore, which was returned to the NSE. Sebi’s order doesn’t mention how much extra was paid to Narain.