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CSE interim committee changes margin payment terms

Rifat Jawaid in Calcutta

Plagued by the massive payment crisis, the Calcutta Stock Exchange on Friday issued directives to all its members informing them about the changed mode of margin payment that the Calcutta bourse's interim committee consisting of six public representatives, three SEBI nominees and executive director unanimously decided.

In a marked departure from the earlier practice, the brokers will no longer be allowed to make their margin payments by cheques. A senior CSE functionary told rediff.com that the move was primarily to prevent brokers from defaulting on payments.

"Our experience from this crisis suggests that the earlier committee headed by the former CSE president Kamal Parekh literally allowed to assume the payment crisis a monumental proportion. Had they been on their toes when Dinesh Singhania's cheques amounting to Rs 200 million bounced, things wouldn't have come to such a pass. The menace metamorphosed into the worst-ever crisis at the CSE only because of the management's blind faith on brokers. Now, with the new system in place, no brokers would be allowed to default their payments," a senior CSE functionary said.

Under the new system, the CSE would remit the concerned brokers' dues from their respective bank accounts.

However, the move has failed to evoke the desirable response from the brokers who are still ruing their devastation in the wake of the payment crisis in Calcutta bourse. Ridiculing the CSE's new move to put the payment system in place, a leading broker argued that the decision was too little, too late.

He said, "What's left now? Where is the prospect of doing any transactions any more? You see, of the total 100 registered brokers, about 600 have suffered badly in this scam. Now these 600 brokers don't even have money to continue trading in the capital market. The irony is that the CSE bigwigs always acted when things had gone out of control. Had they envisaged the troubles before, their follies wouldn't have wreaked havoc in our lives," the broker rued.

The CSE had declared three leading brokers -- Dinesh Kumar Singhania, Ashok Poddar and Harish Chandra Biyani -- and their ten firms defaulters in March when they failed to pay their dues. The decision to declare them defaulters followed the resignations of all CSE board members including its president Kamal Parekh.

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