Cse Awaits Sebi Papers On Pachisia

Once he gets the papers and gets to explain his stand to the president of the exchange, the rest of the exchange's top brass will meet to consider the issue.

Pachisia has been served two notices: One for alleged irregularities in his capacity as an individual member of the exchange, and another in his capacity as vice-president.The second notice is under Section 11 B of the SEBI Act. Sebi's indictment of Pachisia, in carry forward deals as a major official of the CSE governing body, has caused a ripple among the CSE top brass.

It appears that the CSE governing board has not planned any action as of now. The committee members will inspect the papers and data on the basis of which the members have been indicted before deciding on the course of action, said one source. CSE president J M Choudhary, however, remained tight-lipped on the issue.

 

The Sebi guidelines do not give a clear-cut definition on the nature of deals that can be deemed as unauthorised carry-forward transactions, say sources close to those indicted by the watchdog in their defence.

Deals (purchase or sale) with the same broker for the same scrip in the same day or the following day has not been specified as carry forward transactions as per the Sebi guidelines, said a senior Calcutta broker believed to be close to Pachisia.

Bear hammering on the Reliance counter had triggered Sebi inspection of brokers in Mumbai, Calcutta, and Pune early 1996. It was on the basis of this inspection that Sebi has sent show cause notices to the broker members.

In Calcutta, 6 brokers were served show-cause notices: Santholia & Co, Ashok Poddar, Prema Poddar, Vinod Kandoi, Prudential Stock Broking Services and Subhash Pachisia.

One of the show cause notices served to a firm stated: unreported transactions leading to huge built up positions of the broker members increases market risks and thereby, adversely affects the interest of the investors.

On the basis of documents available and inspected, Sebi officials have decided to initiate action under the provisions of the Sebi (Stock Broker & Sub Brokers) Regulation, 1992, as also under the provisions of Regulation 4 of the Sebi (Prohibition of Fraudulent & Unfair Trade Practices) relating to Securities Markets) Regulations, 1995.