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SEBI to probe DSE affairs

Ambarish Mukherjee

NEW DELHI, Aug. 9

THE Securities and Exchange Board of India (SEBI) has decided to start a probe into allegations that some senior officials of the Delhi Stock Exchange officials were forced to quit following pressure exerted on them by the broker-directors with a view to obtain sensitive surveillance data.

The move comes in the wake of the resignation of SEBI-nominated director on DSE board, Mr D.N. Davar, who is also the former Chairman of the Industrial Finance Corporation of India (IFCI). He had quit earlier this week alleging interference by broker-dir ectors in the day to day management of the exchange.

Speaking to Business Line, a top SEBI official said: ``We have been intimated about Mr Davar's resignation. We are taking steps to ascertain exactly what happened which prompted a senior and expert person like Mr Davar to resign.''

The capital market regulator has decided to step in considering that this is almost a repeat of the events which took place a few months ago in the Bombay Stock Exchange, which ultimately led to the ouster of the then BSE President, Mr Anand Rathi.

According to information available, Mr Davar's resignation comes one month after he was removed from the post of the convenor of the exchanges's staff committee and the post was taken over by one of the broker-directors.

This is against the tradition of not appointing brokers as the convenor of the staff committee which is necessary to ensure that the senior staff can perform their duties in a fair manner without succumbing to pressure from brokers.

During the one month following Mr Davar's removal from the convenorship of the staff committee and before his final resignation from the DSE board, the two senior most officials in the exchange's surveillance department have been forced to quit. The list also includes the chief of DSE's administrative department.

Also, during July, Mr Davar's efforts to focus on various important issues which called for immediate attention were ignored by the broker-dominated DSE board, which ultimately led to his resignation.