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Dina Mehta is interim BSE president; Rathi's resignation accepted

NetScribes/Salil Panchal & Rajiv Banerjee

The five-hour boardroom drama at the Bombay Stock Exchange finally ended with the BSE governing board accepting the resignation of BSE president Anand Rathi, following allegations of his involvement in seeking market-sensitive information on the recent bear-hammering at the markets. Rathi's term was slated to end on March 31.

Meanwhile, BSE vice-president Dina Mehta was appointed interim president till March 31, when Rathi's term in office expires. She becomes the first woman to hold that office in the 125-year-old exchange, one of Asia's oldest.

Rathi said he was resigning to "maintain the dignity and credibility" of the president's office.

"I would like to place on record that neither I nor any of the other office bearers have ever been involved in anything that is against the highest ethical standards laid down by us for ourselves," he told reporters after the BSE board meeting.

The Securities and Exchange Board of India (Sebi), India's market regulator, is investigating why India's benchmark BSE index plunged more than 7 per cent by Friday from the levels it hit after last Wednesday's market-friendly budget.

"I am resigning so that Sebi can conduct whatever investigation it wants independently," Rathi said.

"Let there be a proper inquiry into the allegations and I am ready to face the investigations," Rathi said.

Dina Mehta said later, "The current events will tide over. We will fight this all the way. Anyway, it is a matter of a few weeks till the fresh elections,'' she said.

The BSE governing board, in its official statement, said, "In order to maintain dignity of the office and the highest standards of public integrity, Anand Rathi insisted that his resignation be accepted." The governing board has categorically stated that it has accepted his resignation, but with regret.

The outgoing BSE president, in fact, came out halfway through the meeting and said that there was no way that he would be influenced to change his mind.

He put the ball back in Sebi's court, saying that the regulator should conduct and independent inquiry to ascertain the nature of allegations and his role in it. Rathi maintained that he had not benefited in any way from the information that was sought.

The exchange is also set to hold a meeting of broker members at Thursday 5:00 pm to inform brokers of recent developments.

The Bombay Stock Exchange said that on Thursday it has accepted the resignation of its president, Anand Rathi, who is alleged to be embroiled in a scandal involving leaks of privileged information to brokers.

A newspaper reported on Wednesday that Sebi had seized recordings of telephone conversations between Rathi and an exchange surveillance officer. These showed Rathi was given inside information about brokers' outstanding positions in the market, the newspaper said.

Sebi chairman D R Mehta told reporters on Wednesday the market regulator was probing these accusations. Mehta said the tapes were being checked.

Shiv Sena member for probe into role of Sebi

A member of Shiv Sena, a ruling ally of NDA, on Thursday demanded in the Rajya Sabha a thorough probe into the role of market regulator Sebi as he feared a massive scam in the Bombay Stock Exchange since the bear hammering in the stock market began last Friday.

Raising the issue in the zero hour, Sanjay Nirupam wanted to know why Ketan Parekh is being allowed to operate in the stock market as it crashed due to heavy borrowing made by him in contravention of RBI norms.

He disputed the claims of Finance Minister Yashwant Sinha that everything was fine in the share market.

As several opposition members joined Nirupam in demanding a discussion on the serious issue, External Affairs Minister Jaswant Singh said that the government had no objection in having a structured discussion on the allegations made by members.

As and when the business advisory committee decides on the issue, a discussion would follow, Singh said, adding that the finance minister was already seized of the issue.

With additional inputs: Reuters & PTI

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