Chapter 2E: the same bad actors across HDFC, L&T, Tatas. And how they created billions from the NSE colocation scam.
In Chapter 1 of this series of posts I mentioned about Prime Computers. IDM (the company formed on IBM departure in 1977) sold and serviced Prime Computers. I helped HCL and Shailendra Mittal to buy and turnaround IDM in 1989. My iit senior Satish Kini was head of sales and my friend and mentor Ashok Malhotra was the Managing Director. It was here that I first got to learn how PrimeOS worked in mission critical applications like banking with distributed ATM networks. In 1992, Prof Nag set up PrimeTel which took the communications part of PrimeOS and used it to design India’s first mobile network.
When NSE tech built a VSAT network sourced from HCL Comnet. Now they needed a computer network to log the transactions. Just like a bank logs ATM transactions. They turned to COSL.
By 1989–90, COSL had grown rapidly and became the third-largest software exporter from India, behind only TCS and Tata Unisys Ltd (TUL). Its exports were reported at around Rs 9 crore that year (a significant amount at the time, though smaller than the leaders). In 1991, COSL itself “spawned” a new company: Citicorp Information Technology Industries Ltd (CITIL), which focused on developing banking software.
This was the company that was to integrate the NSE network using PrimeOS. But by then Prime Computers had gone belly up and its various pieces were scattered all over. Citicorp was hit by a cybersecurity attack – the worst till then in 1994. Immediately a fund called Citicorp Venture Fund was put together to somehow acquire, paralyse or kill all the companies who knew the Prime architecture. Not to promote them. Prime was vintage – it was written in Fortran.
COSL and Citicorp were the only companies who knew how the NSE computers worked besides one other player – Prinetel. They somehow acquired a stake in the company hiding inside a Trojan horse called Intel Technology. Intel had a vested interest in killing Prime hardware and replacing it with its own.
There was one minor problem. No one could really deliver the fault tolerant performance of Prime. So Intel just copied it. By then Prime was dead and no one was left to sue. Primetel was now a portfolio company to be crushed at will. What else is the Indian legal system good for. A few corrupt lawyers, a couple of compromised judges and some underworld kids were a lethal enough trio. By 2010, the trio were in place. My iit batchmate Ajay Shah was a fundaman on tech trading by then. Krishnan was raking it in as was his lawyer boss with Citi as their private cross border transporter.
Now something happened which no one till this minute of this post knows.
There was not one NSE Server but two.
Who was the country head of Citibank during the colocation scam. And how is he linked to L&T and Tata Trusts. Read my old posts. Why did the havala bank leave India ?
More in the next post.
