Kolkata bourse back in focus after stockbrokers' arrests
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Kolkata bourse back in focus after stockbrokers' arrests

Thursday, 26 September 2002, 07:00 Hrs
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KOLKATA: The arrest of six top Calcutta Stock Exchange (CSE) stockbrokers for a huge fraud last year has brought the bourse back into focus so far as efforts at cleaning up the country's financial markets is concerned.

"It was at the instance of state industry secretary Jawhar Sircar, who is an independent director on the CSE board, that the six powerful brokers were eventually arrested," a trader at the bourse said.

Sircar, a strict disciplinarian, joined the board recently and is believed to have emphasised the government's view on last year's 1.2 billion crisis involving obligatory payments at the CSE, one of Asia's oldest financial markets.

Stockbrokers Harish Chandra Biyani, Ramesh Biyani, Raj Kumar Jain, Gopal Singhania, Vijay Singhania and Basudeo Singhania were arrested Wednesday on charges of collusive trading, manipulation of share prices and misappropriation of public funds.

Another accused in the CSE payments scandal, Dinesh Sinhania, could not be arrested. A search has been launched for him. He is believed to be hiding in either Delhi or Rajasthan.

In March last year, an unprecedented payments crisis gripped the CSE that ruined the fortunes of at least half of the bourse's 500 active broker members. A couple of brokers committed suicide, unable to honour payment promises.

The crisis wiped out over 50 percent of the CSE's Trade Guarantee Fund and impelled all the elected members of the bourse to resign for the first time in its century-old history.

From an average daily turnover of 10.5 billion, the trades fell to around 1 billion after the crisis. The market has recovered after the CSE board was revamped and a stricter vigil on settlement procedures implemented.

The crisis at CSE that engulfed the entire Indian capital market during that time, erupted with four large brokers -- Harish Biyani, Dinesh Singhania, Ashok Poddar and Sanjay Khemani -- taking advantage of governing lapses to build up huge positions in three highly priced technology scrips -- Himachal Futuristics, DSQ Software and Global Telesystems.

Working in tandem with Ketan Parekh, the Mumbai big bull, the four brokers who control over 75 percent of CSE's total trade, had bitten more than they could chew.

The six arrested brokers have been remanded in police custody till October 4.


Source: IANS
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