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BSE board meets over chief's quit offer

The governing board of the Bombay Stock Exchange (BSE) is expected to accept on Thursday the resignation of its embattled President Anand Rathi, who is alleged to have leaked privileged information to some brokers.

"I would not doubt the president's integrity, but I don't see why the board will not accept his resignation," said Bimal Parekh, a director at BSE brokerage Sunidhi Consultancy.

Brokers said they expected the board, which began its meeting at 11:30 a.m., to accept the resignation as it will allow the market regulator to complete its investigation into any wrongdoing by any member brokers in last week's stockmarket crash.

Rathi, whose second term as president ends on March 31, said on Wednesday he decided to quit following media reports of his alleged involvement using insider information which triggered a stocks slump.

The Asian Age newspaper said on Wednesday the Securities and Exchange Board of India had seized recordings of telephone conversations between Rathi and an exchange surveillance officer, which showed that Rathi was given inside information about brokers' outstanding positions in the market.

Sebi chairman D R Mehta told reporters on Wednesday the market regulator was looking into these accusations and that the tapes were being checked.

The market regulator began an investigation into share deals after the benchmark index of the BSE plunged over seven percent from the peak hit after last Wednesday's market-friendly budget and Friday.

Rathi denies wrongdoing

Rathi has denied any wrongdoing and has 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...," Rathi said in a statement.

"I therefore strongly deny all allegations and would like to reiterate that no benefit has ever been availed by me nor I have obtained any privileged information for my own benefit or any other part's benefit," the statement said.

The chief of Delhi Stock Exchange said on Thursday the resignation offer was laudable and would instil confidence in the market.

"I think Rathi's resignation (offer) has to be appreciated. He has done it on moral grounds and it should be taken in positive light," said Sudhir Joshi, president of the Delhi exchange.

"It has a positive impact on public confidence," Joshi said.

If the resignation was accepted, Rathi will be the second BSE chief in a row to lose his office following a stocks scandal. His predecessor J C Parekh was ordered by Sebi to resign in March 1999 for lapses in administration in connection with an investigation into price manipulation in some shares, accusing him of influencing decisions to benefit select brokers.

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