Some shareholders back NSE team as co invites applications for CEO - Times of India

Some shareholders back NSE team as co invites applications for CEO – Times of India

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Mumbai: Amid questions over National Stock Exchange (NSE) moving at a tardy pace in fixing responsibility for the co-location and ‘yogi’ controversies, the existing management has received much-needed support from some of the large shareholders.
The backing comes at a time when the bourse has invited applications for a new chief executive with the incumbent eligible to apply. The current tenure of Vikram Limaye, who was appointed MD & CEO nearly five years ago, will end in July. The bourse’s advertisement for the CEO position follows Sebi regulations for such appointments at an exchange, which was flouted during the elavation of Chitra Ramkrishna to MD’s post in 2013.
After Sebi’s order against Ramkrishna and other former executives, three weeks ago, NSE had said that there was an overhaul of its “board, management and operational structures” and argued that the steps taken had strengthened governance. Although the management has not commented beyond that, some of the shareholders that TOI spoke to seemed to be making the same point.
According to three NSE shareholders, just when Prakash Parthasarathy was to retire as a shareholder-director in mid-2021, the bourse’s board and the management involved its shareholders to select their representative who would join the board. Ashish Agrawal, MD, ChrysCapital, said the “current management and board are transparent” in their decision-making. “Before finalising the board member, NSE asked all the shareholders for their recommendations and later arranged meetings with the candidates finally shortlisted by the board to provide comfort to the shareholders.” The board zeroed in on Vineet Nayar, former V-C of HCL Technologies. Following a go-ahead from Sebi, Nayar joined the board on September 20, 2021.
“This was unthinkable when Ramkrishna was the MD,” a US-based fund manager, who holds a stake in NSE, said. “The NSE management then was very secretive in their interactions with shareholders…they mostly avoided any interaction with us (shareholders). Even if we got a chance to interact with them, such meetings would get over in less than half an hour.”
According to Mark Stoleson, CEO & Partner, Legatum Capital, a Dubai-based fund that also holds NSE shares, the last five years has been a “tremendous success story” for Sebi and NSE. It’s an example in which “the system worked: Sebi raised valid issues and the company (NSE) responded strongly, replacing the entire board, CEO and the management team”, he told TOI.Stoleson said that currently a majority of the board consists of independent directors. “This is better than many of the largest and most well-known listed companies (in India). Second, NSE is fully compliant with Sebi Business Responsibility and Sustainability Reporting Framework. This means it is voluntarily operating in line with standards for listed companies.”
ChrysCapital and Legatum both have been NSE’s shareholders since 2016. Each holds over 3.5% in NSE.
According to a top executive at one of the largest domestic shareholders of NSE, it’s unfortunate that a legacy issue is “leading to reputational loss for the exchange, the regulator and the government”. The four fund managers TOI spoke to said that there have also been improvements in terms of technology, risk management and regulations, which in turn have led to growth in business.



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