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Sebi to supersede CSE board

BS Markets Bureau

The Securities and Exchange of India (Sebi) is to initiate a clean-up operation at the Calcutta Stock Exchange (CSE) in view of the crisis gripping the bourse for the last three weeks.

Sebi will take a slew of measures, including overhauling the CSE governing board and cracking down on the unofficial badla market. "It is inevitable," said a top Sebi official, referring to the necessity of superseding the top management of the bourse.

A senior Sebi official said, "We will be taking steps to crack down on the unofficial market prevailing in Calcutta and action against officials who allowed a crisis of this magnitude to happen." At the moment, however, Sebi was focussing on solving the payment crisis at the bourse, he said.

In its investigation, Sebi is looking not merely at short sales. "Short sales are just an aspect of the entire market mechanics," a Sebi official said, pointing out that there were other reasons for the market crash and other ways of manipulating the market.

Officials said Sebi was waiting for the crucial settlement number 150, due on Thursday, to take place before initiating any measures. CSE president Kamal Parekh had said at a press conference Wednesday that though the pay-in process would be smooth, there could be a marginal shortfall.

Sebi chairman D R Mehta categorically said that he was not going to spell out the regulatory body's possible course of action before that.

Meanwhile, senior Sebi officials from Bombay are still camping at CSE, investigating the transactions for the last two settlements. As per their instructions, the exchange blocked pay-out from 26 accounts which are under scrutiny.

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