In a detailed reply to the action plan, FMC's director DS Kolamkar, has asked whether the top brass of the exchange is at all willing to be professional and impartial. The seven-point letter has touched upon all the controversial aspects of the exchange. It has also expressed its views in seven specific cases, on which the exchange members went to the court.

In the meantime, Kolamkar has also informed Bhag Chand Jain, the president elect of the exchange, that the commission has ruled out commencement of trading in the exchange, till the action plan is being prepared and finalised with a stipulated time frame.

In the proposed action plan, the Hessian Exchange asked for a FMC nominee on the board andin its disciplinary sub-committee to deal with the disputes related to hedge trading.

Reacting to it, FMC stated, "the presence of FMC nominee will not be of much value. He can at best be one of the members. FMC members would not like its nominee to have veto powers. Moreover, the presence of FMC director on these committees may be used as justification for all actions of the committees, as was the case during the survey of goods conducted in September 1998". However, he welcomed the decision to have nominated members.

The Hessian Exchange has proposed that all margin disputes to be refunded strictly in accordance with the bye-laws. The commission has supported this proposal but wanted that the affected parties should be informed about the proceedings and decisions taken by the respective sub-committees. However, Kolamkar added, "in addition to these procedures, it is very important that the committees and sub-committees have the willingness to act professionally and impartially".

The view has beenrepeated by Kolamkar, when the exchange proposed to constitute new committees to handle the irregularities in the hedge trading at the ring hall and the subsequent action on the erring members.

Regarding the waiver of the prescribed penalties, Hessian Exchange has proposed to comply with the disciplinary provisions under chapter XIV of the bye-laws for the purpose of imposition of fines, penalties and suspensions.

However, the FMC is stern in its reply. "The board has not taken action against the erring members in the past. What is the chance that it will stick to the disciplinary provisions under Chapter XIV of the bye-laws now?"

The Hessian Exchange has also proposed to set up an in-house arbitration system to curb the rise in the rising number of court cases, which was welcomed by the FMC. However, sources said that the exchange's article of association has to be changed for this effect. "A general body meeting of the members must also be convened," sources added.

The Hessian Exchange also proposedto amend its respective bye-law so that the board reviews the list of the working jute mills. This will put a check on the pucca delivery orders (PDOs) issued by the sick units. Kolamkar replied, "such a provision already exists. Has it been operated in the past? If not, is it likely to be operated in the future."

The FMC has asked for the details from the Hessian Exchange about the inspection challans, it has proposed to give with the PDOs, according to the ISI norms.

The FMC has also expressed its view on seven specific cases where the exchange members have gone to court. However, as a general statement, Kolamkar noted, "EIJHE should ensure that members of various committees and sub-committees, including court-case committee interested in a particular matter are not allowed to participate and vote, while that matter is being discussed or decided."