Will Damanis Rule Continue?

The adage the more things change, the more they remain the same - seems to apply very aptly to the Bombay Stock Exchange (BSE).

For months, market circles were speculating on who could replace the vocal BSE chief, M G Damani, when his term ends in March, 1998. The grapevine was that two candidates from within the BSE governing board - Deena Mehta and Anand Rathi - were emerging as top contenders for the post. They have now not only taken two steps back (out of contention) but have also quickly extended an olive branch to the chief.

Damani had expressed his keenness to see that younger blood took charge of the BSE in the coming years.

 

There is little to doubt about the work done by Damani over the past two years to boost the status of the exchange, and that, perhaps, could be reason for the support shown by a large section of the broking community for his extension as the president. However, the battle for the coveted post (or should we say the lack of it now?) calls for some soul-searching within the BSE top brass.

A section of the broking community says that Damani is just as keen to alter the rules of the game to prolong his innings. Even his arch rivals (some of them on the governing board) are now singing a different tune. Sebi will now have to decide on the necessary amendments in the SE bye-laws regarding the president's term. It would now not merely be a case of amending the bye-laws but also altering a 1992 Sebi directive to all SEs compelling them to introduce bye-laws for a presidents term of two years.

Governing board members say that there is a lot of unfinished work on Damanis agenda - mainly the actual setting up of the depository which is yet to see the light of the day.

Further, with the BSE locked in a grim battle with the NSE for the coveted position of the premier exchange in the country, the view is that Damanis exit at this stage could blunt competition, and result in the NSE gaining ground.

It is also felt that none of the contenders could match Damanis aggression and clout which has narrowed the competitive gap between the two bourses.

Secondly, it seems doubtful if any of the newcomers would be able to devote the same amount of time as done by Damani. While the high-profile Anand Rathi is often on tours due to his corporate engagements, the broking community had its reservations on whether Deena Mehta would be able to balance the demands of her family and the exchange.