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S.S. Dalmia quits from broking firm board

Jayanta Mallick

KOLKATA, Nov. 29

MR SHYAM SUNDAR DALMIA, one of the 11 persons/entities recently notified by the Custodian in connection with the securities scam of 1992, has resigned from the board of the corporate broking outfit — Dalmia Securities.

Mr Dalmia was a qualifying director of the broking firm in which he has around 12 per cent shareholding. At its meeting on November 23, the firm's board accepted his resignation from the directorship with retrospective effective from November 19.

Dalmia Securities is a Calcutta Stock Exchange-member entity. The Custodian's office recently notified that all the property — movable and immovable — of Mr Dalmia had been attached under the powers of the Special Court (Trial of Offences Rel ating to Transaction in Securities) Act, 1992. The bank accounts of Mr Dalmia have been frozen.

Meanwhile, the Special Court in Mumbai today heard an appeal by Mr Dalmia against attachment of property. The verdict is expected tomorrow.

The CSE Governing Committee, which is meeting here tomorrow, will discuss the situation arising out of the payment default of Mr Dalmia in the rolling settlements for which pay-outs had to be made by the exchange out of its coffers. The current dealings of Mr Dalmia were mostly concentrated in three scrips — Global Telesystems, ACC and SBI. The counter parties are mostly institutions.

CSE wilts under pay-out burden: Meawhile, the financially-beleaguered CSE has waded into further problems given the additional burden of current pay-outs against the trades of the recently-notified entities, particularly Mr S.S. Dalmia, by the office of the Custodian.

The CSE authorities have been making pay-outs for the deals entered into the rolling settlement at CSE by the notified entities. However, the securities paid-in by the counter parties against the transactions entered into by these notified entities legal ly stand attached.

Since the bank and depository participants' accounts of the notified entities have also been attached, they cannot formally make the pay-ins. For the CSE, at stake is the value of total pay-out obligation of notified entities for five days this week.

The exchange authorities have sought the opinion of the Custodian's office in New Delhi on the issue of ownership of the paid-in securities after CSE paid out the cash from its coffers.

It wants the right to auction the shares it received as securities pay-ins, mainly from the institutions and realise the proceedings their off to compensate for the pay-out losses. However, in a falling market, an auction is not a guarantee against full recovery.