Bhubaneswar Se Suspends Four Brokers

In a major cleansing operation, the management of the scam-tainted Bhubaneswar Stock Exchange (BhSE) has suspended four brokers who had defrauded the members' welfare trust of the bourse to the tune of Rs 1.5 crore.

In another development, the former president of BhSE, T D Bhayana, whose broking firm India Finance Guarantee Ltd (IFGL) had received Rs 40 lakh from the scam money has resigned from the directorship and all statutory committees of the bourse.

The former vice-president, A K Sardhana, who is a partner of Bhayana in IFGL, is also likely to resign soon, sources said.

The four brokers suspended from trading in the bourse are director, A K Giridhar, former vice-president Babulal Sharma, former treasurer Anjani Singh and K S N Patra.

"They were suspended following their failure to refund the money taken from the members' welfare trust of the bourse within the stipulated time," Jay Sadany, executive director, BhSE told Business Standard.

Another broker, DP Singh, against whom suspension proceedings had also been initiated for the same reason, however, has escaped action by securing a court injunction.

Sadany said, the BhSE management council in its last meeting on March 1, had set March 20 as the deadline for refund of money.

The council had resolved that if the defaulting members did not pay back their dues within the stipulated time, action will taken to suspend them from trading activities.

Meanwhile, sources said, the BhSE council, which is slated to meet on March 26, will consider a proposal for initiating legal action to recover the trust fund money from the suspended members.

The council meeting, among other things will also consider the notice given by some members to convene an extraordinary general meeting to consider the situation.

Today's action comes months after the scam involving the siphoning off of the BhSE fund through sanction of loans from the members' welfare trust was exposed in September, 2001.

All the loans which have become bad debt were taken between 1998 and 2000.

The major defaulter among the suspended members is former vice-president Babulal Sharma against whom the pending loan and interest now stands at Rs 1.43 crore.

The Securities and Exchange Board of India (Sebi) had launched an investigation into these financial irregularities in October, 2001 and instructed the BhSE council management to take action against the defaulting members.

The executive director, Sebi, Pradeep Kar, in a letter to the state finance secretary had assured steps for suspension of the tainted members and initiation of investigation into the account of IFGL, the major beneficiary of the scam money.