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July 11, 2001
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Money > Business Headlines > Report July 11, 2001 |
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'CSE crisis unique'BS Bureau The crisis on the Calcutta Stock Exchange was unique, said members of the Joint Parliamentary Committee investigating the meltdown of March 2001. The JPC, which spent the day (Tuesday) conducting a preliminary fact-finding session at the bourse, will soon be forwarding a set of questions and summoning members of CSE to testify in the capital. Speaking on the sidelines of a formal press conference, the JPC members, belonging to the ruling National Democratic Alliance as well as the opposition, pointed out that the uniqueness of the CSE problem, differentiating it from the scam on the National Stock Exchange and the Bombay Stock Exchange, "would challenge the drafting skills of the JPC because we have to ensure that the CSE report is not diluted by the report on main scam". The NSE and BSE scam related to the 'illegal' use of co-operative bank funds to fund speculation in 10 scrips cornered by stockbroker Ketan Parekh and the alleged insider trading by the BSE president using information from the surveillance department. On the contrary, in case of the CSE scam, no allegation has been raised over any 'illegal' use of funds. The CSE crisis appears to have revolved around a flawed software package that enabled brokers to take large positions without the trades showing up for purposes of margin money calculation. The members said that it is for the JPC to determine now, a) how the exchange was running on a flawed software package; b) how and when the flaw came into existence; c) when the flaw was detected and whether the exchange authorities deliberately chose not to rectify flaws in the system; and finally d) whether IndusInd Bank informed CSE on time that cheques issued by broker had bounced and whether CSE ignored the lead and allowed the traders to continue trading. JPC would be summoning CSE members, clearing bankers (IndusInd Bank) and software service providers (CMC Ltd) to determine all these issues. JPC chairman P M Tripathi said the unique nature of the CSE scam posed a challenge just as the 1992 JPC had faced the challenge of integrating the report on the role played by public sector units into the main report of the Harshad Mehta scam. "Some of the members served in the 1992 JPC, so we have experience on our side," he commented. Powered by YOU MAY ALSO WANT TO READ:
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