SAT member expresses regret over remarks on BSE case

In a rare instance, a member of the Securities Appellate Tribunal has expressed "regret" over his harsh remarks against the BSE in a case pertaining to an appeal filed by stock broker Keynote Capital.
The tribunal in March dismissed Keynote Capital's appeal against the BSE and ICCL (Indian Clearing Corporation Ltd) -- a subsidiary of the Bombay Stock Exchange.
While the majority order directed the appellant to resolve the issue with the exchange, SAT member A S Lamba in his dissenting order made harsh remarks against the BSE.
Lamba has expressed regret following an application filed by the BSE seeking review of observations made in his order.

The case relates to Keynote Capital raising about Rs 89 lakh after selling ABG Shipyard shares that were registered in the name of Prime Securities. These scrips were sold since Prime Securities had outstanding dues payable to Keynote Capital.
Keynote Capital later deposited the amount with the BSE as the latter said Prime Securities was found to be a defaulter to it as well as ICCL.

As the exchange did not return the money, Keynote Capital appealed to SAT.
"... The undersigned also expresses regret at his harsh remarks against original respondent 1 (BSE), which can be seen as arising from material placed in minutes of order and hope the same will be taken in right spirit and original respondents will deal with their clients (brokers etc), in future, in more equitable, fair, just and professional manner," Lamba said in his order dated April 16.

In his dissenting order on March 25, Lamba said he was "constrained to point out lack of promptitude, sensitivity, clock and dagger approach and insidious manner of dealings of respondent No 1 (BSE) in the entire matter, which is not a healthy and fair way of conducting business by an organisation which claims to be pioneering in securities market in India and is a trendsetter for other stock exchanges in India and abroad".
Meanwhile, Lamba in his latest order (April 16) also clarified that he was not made aware that defaulter committee (which comprised of professionals of good public standing) of ICCL would look into the broker's case.

He also mentioned that he had "no hesitation/reservations in remanding the matter to defaulter's committee of original respondent 2 (ICCL), who will take a fair, rational and equitable decision in the matter by providing copies of all relevant correspondence/documents to original appellant (Keynote Capital) and after giving them opportunity of being heard in terms of minutes of order".
In his March 25 order, Lamba was of the view that BSE "has vested interest in the matter (conflict of interest referred to above) and hence is not expected to do justice in the case".