Sebi summons CSE board for hearing on Oct 9

KOLKATA: The Securities and Exchange Board of India (Sebi) has summoned the governing committee (board) of the Calcutta Stock Exchange (CSE) for a "personal hearing" on October 9 in Mumbai before a whole-time director of Sebi.
The Sebi directive has come in the wake of a submission made by the broker directors on the CSE board before the market regulator after Sebi issued a show notice to the exchange.The Sebi summon reached CSE on Tuesday.
In a parallel development, state commerce and industry secretary Sabyasachi Sen has resigned from the governing committee of the CSE. Sen, who was a Sebi nominee on the CSE board, has sent his resignation letter to the market regulator.
Market sources said that Sebi had asked the governing committee members of the CSE to be present on October 9 before its (Sebi) whole-time director with all relevant documents.
The market regulator has also warned that if the committee members failed to appear before Sebi authorities on the stipulated date then it would make an ex-parte decision regarding the exchange.
Sebi had issued a show cause notice to CSE early this month on why the incumbent governing committee of the exchange should not be superceded in view of various "management deficiencies" that were detected.
Sebi had observed in its notice that it detected several pitfalls in surveillance system, risk management system, software system etc of the ex-change. It might be pointed out that after the 2001 market scam, Sebi noticed similar deficiencies in the exchange.
After being slapped the notice, the broker directors on the governing committee of the exchange had furnished their reply and also sought a personal hearing to explain their stand on CSE matters.
There was apprehension in market circles that Sebi would supercede the governing committee and appoint an administrator.
It might be pointed out that following the show cause notice, CSE president Supriyo Gupta, alongwith three other public nominees on the governing committee, had stepped down.
Talking to TNN, a broker director said "though we thought of convening a board meeting to discuss the Sebi directive on personal hearing, however, it would not be possible now as L M Gupta, who is now the chairman of the governing committee, is out of town".