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Money > Business Headlines > Report July 27, 2002 | 1243 IST |
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IndusInd rebuts JPC charge of fuelling CSE payment crisisBS Banking Bureau IndusInd Bank has refuted the findings of the Joint Parliamentary Committee's draft report that it was responsible for the Calcutta Stock Exchange payment crisis. The JPC had in its draft report said that it has found evidence pointing to a collusion between IndusInd Bank and CSE to delay the knowledge that four cheques amounting to Rs 153 million had been issued by brokers without adequate funds. IndusInd has written to the JPC saying there was no collusion between the exchange and the bank and it was not responsible for the CSE payment crisis. It has, in fact, alleged a criminal conspiracy between CSE officials and its elected broker-members and blamed 'criminal negligence' on the part of CSE officials for the crisis. JPC had also raised questions on the bank conveying the information of the dishonoured cheques to the president and other elected broker-members of CSE instead of the executive director or the margin department to whom the bank normally reports on any shortfalls and incidents of dishonour of cheques. According to the bank, the CSE submissions that their elected broker-members were not involved in the day-to-day working of the exchange is not tenable. It added that on March 7, 2001, CSE's broker-members were operating the IndusInd Bank account in which the four cheques of Rs 153 million were deposited and dishonoured. CSE had alleged that due to the delay in the intimation of dishonour, they effected the payout under the impression that the cheques had been credited and the trading terminals of the concerned defaulting brokers could not be disabled after normal trading hours on March 8, 2001. Consequently, the defaulting brokers carried forward their net positions on March 8 leading to the payment crisis. Terming the CSE's claims as baseless and false, IndusInd Bank said that the bank had reported the pay-in default of Rs 728 million by D K Singhania and Rs 708 million by Arihant Exim Pvt Ltd on March 8. The bank had the written acknowledgment of CSE on the dishonour of all these cheques. According to IndusInd Bank, by the evening of March 8, which was the pay-in day for settlement No 2001148, CSE had all information about their defaults and dishonour of the various cheques. Even after receiving the dishonoured cheques on June 10, 2001, CSE still effected the pay-out on March 12 and the bank was not a party to it. It also added that instead of immediately deactivating the trading terminals of D K Singhania and Arihant on the receipt of the dishonor of cheque on March 8 at 1815 IST, CSE had allowed Singhania to carry forward his position on March 8 between 1820 and 1835 and Arihant between 1820 and 1840 IST. According to IndusInd, even the Sebi report had said that Arihant's terminal was disabled on March 7,2001, the terminals was re-activated by CSE officials with the connivance of the brokers. It went to the extent of saying that "this could not happen unless there was a criminal conspiracy between CSE officials and its elected broker-members or criminal negligence on the part of CSE officials". ALSO READ:
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