The trading member shareholders of the exchange raised objection on the AGM, which was chaired by the acting chairman Mukund Shah.
"This AGM was illegal as it was chaired by a person, who faces allegations including court cases against him. We have objection as Shah is not suitable as per the regulator's directions about the fit and proper person," said Vishnubhai Patel, president, VSE Brokers' Forum.
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The brokers and trading members raised objection about the illegally clearing the financial accounts for the year 2012-13 against Securities and Exchange Board of India (SEBI)'s rules. Brokers alleged that the board had violated SEBI's rule regarding directorship on the board of a regional stock exchange (RSE). As mandated by SEBI, an RSE will have equal number of Public Interest Directors (PIDs) and shareholder directors on its board.
"The board could not respond to the arguments raised by the trading members. Hence, the AGM was adjourned till the next date," said Patel, who is also a trading member at VSE.
Notably, the incumbent chairman, Samir Joshi, who was also one of the public interest directors (PIDs) on the board of RSE had resigned on September 15.
The trading members of the exchange also raised several issues including alleged financial and operational mismanagement by the promoters of the exchange.
Due to uproar and constant disturbance from the trading members of the exchange, the procedures including presentation of the annual accounts were not on record.
Exchange officials informed that the AGM stands cancelled and will be convened again to consider annual financial accounts.
Meanwhile, SEBI has approved two names for the post of public interest directors (PIDs) on the board of directors of the exchange. Rajesh Nagra, a chartered accountant and Ajitsinh Sokanki an advocate have been approved by SEBI as PIDs.
Notably, after Joshi's resignation, Mukund Shah was the only active PID on the board of VSE as two other PIDs including Niklanth Jani and Dhiren Mehta have not been attending meetings. The number of shareholder directors on the board of exchange was four, higher than the PIDs.
With the addition of the two new names as the PIDs, now the total number of PIDs at the VSE stands at three, while shareholder directors too are three at present.