Putting an end to over three months of uncertainty, the Securities and Exchange Board of India on Thursday superseded the committee of the beleaguered Calcutta Stock Exchange for failure in the management of the bourse.
SEBI's action followed a show-cause notice to the exchange in August this year when it had pointed out a number of failures of the management committee in implementing the directives of the market watchdog.
In a communication addressed to the secretary of the CSE, SEBI said the Committee had been superseded for one year from December 4 and appointed Officer on Special Duty Tushar Kanti Das as the administrator of CSE with powers to perform all functions and responsibilities of the existing Committee. The SEBI order was passed under section 11 of Securities Contracts (Regulations) Act.
The SEBI order had been passed after consideration of the replies by the broker directors of the CSE, who had vehemently opposed the move.
This was one more setback for the CSE, which had moved from crisis to crisis since March 2001 when a major payment imbroglio involving over Rs 120 crore had led to a crash in share prices across the country.
The exchange never recovered after that and was gradually losing its relevance mainly after the ban on forward trading (badla) in July 2001, which led to drastic fall in the average daily turnover of the exchange to barely Rs 5 crore from a peak of over Rs 1,800 crore.