IPSTA EGM Rejects Move To Enroll More Members

Kochi, December 24: | Updated: Dec 25 2002, 05:30am hrs
Efforts to widen the base of the world's only pepper futures exchange, India Pepper and Spice Trade Association (IPSTA), and bring in more members suffered a setback when the EGM rejected the board proposal. Also, the proposal to go online received cold response and continues to remain at the plan level.

Following the Forward Markets Commission (FMC) recommendation that more farmers should be brought in as members, the IPSTA board had suggested reducing the trade guarantee fund (TGF) entry fee from the present Rs 50,000 to Rs 10,000. This was owing to the fact that the TGF had accrued to Rs 1 crore, the limit set by FMC. The board was also in favour of totally doing away with new members having to contribute to the TGF. In such an event, a new member would only have to make an entrance fee of Rs 15,000.

However, a section of the members vociferously turned down the proposal and felt that as they had already contributed to the TGF, others willing to become members too should pay such an amount.

IPSTA president Jojan Malayil, who took over as head recently, said that it was sad that a large section of the members did not want to expand the frontiers. As this was the only global futures exchange in pepper, it was important that members realised its relavance and tried to bring in as many members as possible. This would also help raise volumes.

On the issue of going online, members wanted the managing committee to get back to general body which would then decide on the amount and the software company to be awarded the contract. Mr Malayil said the earlier committee's decision to go back to the members even when it had their nod was the cause for all the hurdles. At the last general body, a section of the members had caused a melee and literally `shouted down' the online proposal. Hence the decision was kept in abeyance then. At the EGM on Monday there was a twist to the issue with a section demanding that as there was already a proposal to go online, the committee should get back with the details of the companies which had bid and the amount.

Mr Malayil said it appeared that at least of a handful of the members were not keen on letting others from outside come into the trade scene. With the moves on for multi-commodity national exchanges, it was only natural that if IPSTA did not rise to the occasion, it would soon be wiped out, he feared.

Board member Ravindra Lele said the FMC had only suggested online trading and it was not mandatory. As there were a large number of small players in the exchange, going online would leave trade in the hands of a few big players, marginalising the small ones.

A section of those favouring going online alleged that some of those opposed to online trade were hand-in-glove with those bidding for the national multi-commodity exchange.