Bse To Auction Membership Rights Of Four Defaulters

The Bombay Stock Exchange (BSE) would auction the membership rights of four defaulter members of the exchange. However, the authorities declined to give the names of the defaulters.

However, according to market sources, among the four memberships on the block include those of Sharedeal Finance (Ajit Ambani) and Orient Shares, who were declared defaulters earlier due to non-fulfillment of pay-in obligations in the case of Amara Raja Batteries.

Senior BSE officials said the membership rights would be unencumbered, meaning no liabilities arising out of the previous members' dues would be attached to these trading tickets. The exchange has fixed October 25 as the last date for submission of the applications. The auction is open for all those meeting the eligibility criteria including individuals or corporates. All those who are eligible to become members of the exchange as per the by-laws may tender their bids.

However, the offer is not open to subsidiaries of the recognised stock exchanges, according to top BSE officials. Several regional stocks exchanges have floated subsidiary firms which, in turn, have bought membership rights of major stock exchanges to offer trading facility to their members.

The applicants would be required to clearly mention the amount of offer and each offer should be accompanied by demand draft of Rs 25 lakh as earnest money deposit on which no interest will be payable, BSE sources said. The earnest money will be forfeited if the successful applicants fail to pay the remaining amount within the stipulated time.

The shortlisted applicants will have to comply with the required procedure for admission as members of the BSE. The procedure may include scrutiny of the applicant's financial statements and interview of the designated directors. Wherever considered fit, designated directors may have to appear for a written examination also. According to BSE officials, those applicants whose offers are accepted will have to pay Rs 25 lakh within a month of acceptance of the offer. The remaining offer amount will have to be paid within one month from the date of receipt of intimation of selection.