VSE minority shareholders demand removal of directors

Allege board of directors to be incompetent and lethargic in operations

The minority shareholders of the Vadodara Stock Exchange Limited (VSEL) have demanded removal of the existing board of directors including the two public interest directors (PIDs), alleging mishandling of the exchange operations and repeated violation of rules. The minority shareholders have already submitted their complaints and representation to the market regulator, Securities and Exchange Board of India (SEBI) in this regard.

In a fresh attack on the existing board of directors of the exchange, the minority shareholders alleged that the board of directors did not consult minority shareholders while finalizing the directors’ report ahead of the annual general meeting of the exchange.

“The board of directors of the exchange is operating autocratically. They have given misguiding statements in a recent directors’ report, wrongly claiming that they had convened a meeting with the minority shareholders to finalise the roadmap for SEBI’s Rs 100 crore net worth criterion. But in reality there was no such meeting called by the board,” alleged one of the shareholders at VSEL also alleging that the directors’ report was not signed by the directors, as required under the companies act.

Minority shareholders of the exchange include trading members, who collectively hold around 47 per cent in the exchange.

“The annual general meeting (AGM) had to be adjourned twice. This has never happened in the history of this exchange. The accounts are not getting passed, therefore the exchange has to face heavy penalty from the registrar of companies,” said Vishnubhai Patel, past chairman of VSE and chairman of VSE Brokers’ Forum.

“The directors are incompetent to operate the exchange. It is because of their lethargic approach and inability that the exchange is facing such crisis. We reiterate our demand to supersede this board in the interest of the overall stakeholders of the exchange,” said Patel.

Currently, there are around 70,000 depository accounts at the VSE and over thousands of investors are associated through them.  Despite repeated attempts, the public interest directors could not be reached for comments.