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JPC members take exception to sacking of CSE ED

Jayanta Mallick

KOLKATA, Aug. 15

A MAJORITY of the members of the Joint Parliamentary Committee has taken strong exception to two recent steps taken by the Calcutta Stock Exchange governing committee.

During the last fortnight, the governing committee had sacked the Executive Director of the bourse, Mr Tapas Dutta, and decided to seek permission from the Registrar of Companies (RoC) to postpone the AGM by three months.

Mr Nilotpal Basu, a JPC member, told Business Line over the phone from New Delhi that the decision to terminate the employment of the ED had serious implications for the JPC investigations into the stock scam and complicity of former CSE broker-directors . The JPC will take a formal view on the matter on August 20, when it meets to decide on the course of the investigation.

According to Mr Basu, Mr Dutta is a key witness in the scam. ``He has already provided vital information to the JPC regarding complicity of the former CSE President, Mr Kamal Parekh, and the Vice-President, Mr K.K. Daga, as regards reported suppression o f the fact that some of the cheques submitted by Mr Singhania and others for margin payment had bounced,'' Mr Basu added.

The future testimony of Mr Dutta would also be crucial during cross-examination of officials of the Indusind Bank and CMC Ltd to get to the root of the scam at the CSE. ``Removing the ED five months after the so-called payments crisis at the CSE is intri guing,'' Mr Basu felt.

The issue may come up at the JPC's meeting with the SEBI top brass on August 27. Mr Basu said that the JPC was likely to call Mr Dutta as a ``knowledgeable individual witness'' in the near future.

The JPC members are keen to know what the SEBI inspection report -- on the basis of which Mr Dutta was sacked last week -- has to say on the surveillance failure and the complicity of broker-directors in the CSE portion of the stock market scam. The JPC is also trying to find out whether SEBI will fix the accountability only on the ED of the CSE.

In its preliminary report, SEBI had clearly mentioned the links between Mr Dinesh Kumar Singhania, who was a director of the CSE, and Mr Ketan Parekh. SEBI had also detailed the transfer of funds from two Ketan Parekh entities to Mr Singhania and a few o ther frontmen (all former CSE members) for alleged manipulation of certain stock prices. The market regulator is yet to submit its final report to the Union Government.

Further, SEBI mentioned Mr Kamal Parekh's name in relation to Mr Ajay Kayan, another CSE broker, who was part of the six brokers/entities allegedly responsible for the stock market crash after the 2001-2002 Budget presentation.

It may be mentioned here that Ms D.N. Raval, ED of SEBI, who is on the CSE committee, was present at the two meetings which took decisions on the AGM and Mr Dutta.