Sebi may complete CSE probe today

Kolkata, May 7: THE Securities and Exchange Board of India (Sebi) has almost completed the probe into the alleged bungling which caused a payment shortfall of Rs 90 crore at the Calcutta Stock Exchange (CSE) leading to a nationwide crisis in stock markets in March.

The four-member independent team of Sebi is likely to finish the job by tomorrow.

“We will be leaving on May 8 after completing the probe,” a team member said.

The Sebi sleuths began probing the alleged irregularities at the CSE on May 2 in connection with the collection of margin from ‘influential’ brokers, the failure of which caused the payment shortfall during settlement numbers 2001148 to 2001149 two months ago leading to the crash in bourses across-the- country.

Confirming the investigation by the market regulator, the CSE executive director Tapas Dutta had earlier said: “Yes, four to five Sebi officials have come to the exchange to examine the functions and inspection is being done.”

Meanwhile, the Sebi team comprising two officials from its Mumbai office — Sunil Kadam and Ravendran — and two from Kolkata office, including regional manager Dulal Chandra, are so far ‘satisfied’ with the probe as a team member claimed it was a ‘routine’ probe.

The payment shortfall in March had put the exchange on the brink of collapse after Rs 38 crore of its Settlement Guarantee Fund (SGF) was wiped out.

“Only because of the fault of three or four members, the entire broking fraternity of the exchange is now under threat of survival,” a broker said.

The CSE will take a decision on Monday on whether to issue ‘notices’ to other members of the exchange, who had failed to pay in Rs 5 crore in the past few settlements.

“The exchange is in a severe crisis due to lack of funds and any contribution at this point will help,” an official said.

If at this point of time, the three main defaulters — Dinesh Singhania, Harish Chandra Biyani and Ashok Poddar, who together owe Rs 92 crore to the exchange — could repay even a part of their dues, the crisis in the exchange would blown over, he said.

The CSE’s ambitious plan to prepare for derivatives trading was also doubtful, considering the fact that its Settlement Guarantee Fund had come down significantly and the market watchdog might not give the permission to go ahead with it.

“We need only Rs 21 crore to begin derivatives trading. Of this Rs 15 crore would be deposited intoSettlement Guarantee Fund and the balance would be needed for purchase of hardware and software,” a stock exchange official said.

Though a majority of CSE brokers were ready to cough up funds towards this, ‘unwillingness’ of the three main defaulters to bring in even a part of their dues is believed to be coming in the way.

“Let the so called well wishers of CSE give the slightest hint that they will repay part of their dues, we will arrange the rest of the amount,” a broker said. (PTI)