CSFB cuts staff, set to wind up India division

MUMBAI: Regulatory pressures on the Wall Street to hive off research operations from broking has taken its toll in India, with international investment bank Credit Suisse First Boston (CSFB) on Wednesday retrenching its employees attached to the equity research desk. Market sources said CSFB was winding up its Indian operations, since, at present,it only has research operations, after it discontinued trading and back office functions two months back.
Though an official confirmation from the firm’s Hong Kong spokesperson was not available, a CSFB official in India confirmed the development.He said that CSFB has gone on a cost-cutting exercise across major Asian markets in the last six months on account of poor market conditions. Only three research analysts and KR Bharat, who heads the Indian operations, are being retained, though there are apprehensions that they, too, will face retrenchment, said market sources. On Wednesday, seven analysts were asked to leave.
CSFB had a 39-strong workforce till two months back, when trading operations were closed down,’’ said sources.
This development gains significance in the light of the Joint Parliamentary Committee (JPC)’s final report on the 2001 stocks scam charging CSFB for colluding with scam-tainted broker Ketan Parekh in manipulating certain scrips and engaging in circular transactions and synchronised trades to create artificial volumes in these scrips.
SEBI had suspended CSFB India Securities for two years, with retrospective effect from April 18, 2001, for its alleged involvement in the March 2001 securities scam. In its order, SEBI had held that till the completion of the investigation and enquiry proceedings, CSFB should not participate in any market transactions.
Sources added that the broking firm has not surrendered its licence and may restart its trading operations once the ban is lifted in April 2003.