Decision On Supersession Of Pune Se Board Likely Today

The decision on the supersession is likely today itself. While it was earlier believed that the Sebi may not press for the drastic step, the situation in the stock exchanges and the grave nature of the problem in Pune may force it to feel otherwise, market sources say.

Sebi chairman D R Mehta declined to spell out what course Sebi may take but said:

"The question of supersession depends on the merit of the case and will depend on the hearing today.

The resignation by five board members does not influence the decision in this regard",

The PSE board has already submitted their reply to the show-cause notice issued by the regulator earlier. It is learnt that the reply was submitted to Sebi on September 18, 1996.

Mehta said: " Now that the replies of the PSE board members have come and that we have our investigations report ready, in all fairness we should grant them hearing".

The public nominees who are still on the governing board of the exchange and the executive director P L Kadlsakar will be present at today's hearing.

Five members of the PSE board had resigned some time back taking moral responsibility for the alleged illegal badla going on at the exchange. Sebi had started the investigations into the illegal badla at the end of last year on the PSE and the Calcuatta Stock Exchange.

Sebi had show-caused the entire PSE board for letting the illegal badla transaction go on at the exchange and 33 brokers for doing carrying forward their position without Sebi approval on September 2, 1996.

Interestingly, the PSE has its annual general meeting tommorrow where five new members are likely to be elected to the board.

Sebi had show caused the entire PSE board asking it why it should not be superseded for failing to ensure that no violation of Sebi norm took place and that governance of the exchange was carried out according the well laid out norms.

The PSE has now saught Sebi permission for commencing the carry forward transaction and it is learnt that Sebi is likely to grant permission of badla in about 10 scrips to begin with.

The exchange members have been carrying forward their transaction over several settlements without setttling the account under tacit approval of the governing board of the exchange.