BSE Panel To Select Executive Director

Mumbai, May 24: | Updated: May 25 2002, 05:30am hrs
The Stock Exchange, Mumbai (BSE) has constituted a high-level committee — comprising some of the biggest names in the world of finance — for the selection of the next executive director (ED) of the bourse. The new ED will be redesignated managing director and CEO once the exchange is corporatised.

The committee will be headed by Deepak Parekh, chairman, Housing Develop-ment Finance Corporation (HDFC). The other high-profile members are KV Kamath, CEO and managing director, ICICI Bank, Janaki Ballabh, chairman, State Bank of India (SBI) and SS Thakur, public representative on the governing board of BSE.

According to reliable sources, even the capital market regulator, the Securities and Exchange Board of India (Sebi) has cleared the composition of the committee following which the process of identifying the new ED for the country’s oldest stock exchange has been kicked off.

A BSE spokesperson also confirmed the move, saying, “The committee for selection of executive director for BSE has been finalised.” However, the spokesperson refused to divulge the details about the composition of the committee.

The selection to the post of ED also gains importance because its formation coincides with the efforts of the exchange to demutualise and corporatise itself.

The appointment of the high-profile panel for the selection of ED is also important as this time the panel does not have any representation from BSE’s broker-directors or office bearers. Mr Thakur, who represents the governing board of the BSE in the committee, is not a brokers’ representative but a public director. In the earlier instances, the committee hardly had any outsiders as its members and was overflowing with brokers’ representatives and governing board members.

BSE has already submitted a scheme for converting itself into a demutualised and corporatised entity and after the corporatisation of the exchange, the position of the ED would be re-designated as managing director and chief executive officer. Sebi, on its part, has also appointed a panel, headed by Justice MH Kania, to suggest the modalities for the conversion of stock exchanges into corporate entities. The Kania committee will also look at the issue of consolidation among stock exchanges.

The selection committee for the appointment of executive director, as the panel is called, has been formed as the three-year term of the current ED AN Joshi comes to an end in August this year. Mr Joshi was appointed as an ED of BSE in August 1999, following the exit of his predecessor RC Mathur, who was asked to vacate his post in the wake of the controversy involving the stocks of BPL, Videocon and Sterlite, in June-July 1998. The then president and vice-president of the exchange — JC Parekh and Rajendra Banthia, respectively — were asked by the regulator to step down.

Even Mr Mathur’s predecessor AN Kolhatkar’s term as ED was mired in controversy and he was also asked by the regulator to go.

BSE opted for the committee system to hunt for its executive directors following the completion of the term of the government-appointed ED MR Mayya’s in 1993. Mr Kolhatkar was the first ED of BSE to be appointed through the process of the selection committee.