SC notice to erstwhile Saurashtra Kutch Stock Exchange on Sebis plea

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Jan 30 2010, 04:16am hrs
The Supreme Court has sought reply from the erstwhile Rajkot-based Saurashtra Kutch Stock Exchange (SKSE) on an application filed by market regulator Sebi in a matter related to renewal of recognition to the former.

Securities and Exchange Board of India in its application has sought clarification of the apex courts July 2009 order on the ground that there was no question of a fresh application for renewal and in effect and substance the liberty given by the apex court to SKSE would and could only be to file an application for seeking recognition and not for renewal of recognition.

A Bench headed by Justice HS Bedi has issued notice to SKSE after Sebi sought clarification of the order that gave liberty to the exchange to move an application before the market watchdog for seeking renewal of recognition and the same was supposed to be disposed of expeditiously.

The erstwhile stock exchange had challenged the sectoral tribunals decision which upheld

Sebis order that withdrew recognition a day before the due date of renewal that is July 9, 2007, on grounds of misappropriation of funds by the management.

The Securities Appellate Tribunal had dismissed the erstwhile exchanges plea on the ground that the exchange was not been functioning for past several years and no trading had taken place on its platform.

SKSE had alleged that the single member of Sebi had no power to pass order of cancellation or withdrawal of recognition and only the full Sebi board could do that, it said.

Stating that it was providing services to a large number of investors in Saurashtra and Kutch, the erstwhile stock exchange said that it was recognised under the provisions of the Securities Contracts (Regulation) Act, 1956, and has been dealing in securities since 1989 and about 80 of its 400 members were actively participating in market activities through its subsidiary company SKSE Securities Ltd.

While stating that there were about 30,000 beneficiary owner client accounts in the depository participant of CDSL, the appellant had stated the daily turnover of its subsidiary company on NSE and BSE was Rs 50 to 60 crore. It also claimed having demat shares worth Rs 450 crore in the trading accounts.