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The Rediff Business Interview/J C Parekh

'I've always worked in the interest of the market. I'm innocent. I'll fight back'

I feel deeply hurt," said J C Parekh, president of the Bombay Stock Exchange, reacting to the Securities and Exchange Board of India's directive asking him to step down from the top slot at the country's premier bourse.

This is the first time the head of an Indian stock exchange has been asked by the market regulator to resign on charges of corruption.

"I'm going to fight back and prove that I'm innocent," Parekh told Rediff On The NeT, hours after the Bombay high court dismissed his petition seeking a stay on the SEBI order.

Parekh has been accused by SEBI of rigging the prices of some shares like BPL, Videocon and Sterlite in conjunction with some brokers, and using their computer terminals for settlements after the official closing hours of the market.

Parekh has also been accused of colluding with Harshad Mehta, the main accused in the multi-billion-rupee securities scandal of 1992, in the manipulation of share prices, a charge he vehemently denies.

Parekh offered his side of the story in a tete-a-tete with Syed Firdaus Ashraf. Excerpts:

What will be your next step?

I'm going to appeal to the ministry of finance [the appellate authority] against this decision. It is a very unfair decision. I'm going to fight back and prove that I'm innocent.

The Bombay high court has dismissed your petition for a stay.

This is not true. The court has allowed me to continue as president till March 31, provided I don't use my executive powers.

What was your initial reaction to the news?

I felt disappointed and hurt. I just could not believe that such a thing could happen to me. I've always worked in the interest of the market. The allegations have really shattered me. But I will appeal against my sacking.

Why do you think SEBI acted the way it did, considering that your term as BSE president was anyway going to end on March 31?

I think you should pose this question to SEBI.

SEBI had sought a clarification from you before issuing the directive. What happened?

You see, I had clarified in my reply to SEBI that the brokers who operated after market hours were only settling their deals. And both buyers and sellers knew this. In fact, SEBI too was aware of this. Still they took this decision.

The post-Budget market has been on an upswing. But the Sensex lost 75 points today. There are fears that scams at this juncture will erode investors' confidence in the market.

No, I don't think there will be any long-term effect on the markets. You see, this issue was highlighted seven months ago, but there was no major effect on the market. So I don't think there will be repercussions for the market even now.

There is a view that all is not well between SEBI and the BSE. In November 1998, BSE vice-president Rajendra Banthia was forced to quit on similar charges.

You see, it was a different case. I don't know what happens inside SEBI, only SEBI can answer such questions.

Photographs: Jewella C Miranda

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