The Bhubaneswar Stock Exchange (BhSE) has posted a net loss of Rs 8.14 lakh for 2011-12 as rise in operating expenses and slide in dividend earnings from Inter-Connected Stock Exchange of India weighed on the regional bourse.
This is for the second consecutive year that BhSE has logged a loss, after recording a net loss of Rs 18 lakh for 2010-11 which was the first in its history. The accumulated loss of the exchange has now reached Rs 20.53 lakh.
While operating expenses of BhSE went up by Rs 2.21 lakh in 2011-12, dividend earnings slumped by Rs 1.4 lakh. The solvency and liquidity position of the exchange has been seriously impaired by spurt in short-term borrowings from Canara Bank amounting to Rs 40.22 lakh and non-recovery of income tax refund amounting to Rs 53 lakh, said a member requesting anonymity.
Debraj Biswal, chief executive officer (CEO), BhSE said, “Actually, we have recorded a profit of Rs five lakh on the current account in the last fiscal. The losses shown in the book are in fact the piled up statutory dues payable to the Securities and Exchange Board of India (Sebi). The amount was covered up as BhSE’s income.” He also rubbished the claim that short-term borrowings had impacted the exchange’s liquidity and solvency position. “The borrowings were taken up mainly to meet our building expenses,” Biswal maintained.
Meanwhile, Biswal is also facing allegations of violating Model Rules enforced by Sebi in 2001 which requires that the CEO of an exchange should not be of more than 60 years age.
“Biswal is not eligible to hold the post of CEO as he is already 63. It is a blatant violation of the Sebi Model Rules,” said M N Ray, former public interest director of BhSE. Biswal, however, defended his continuance as the CEO of BhSE.
“I am continuing as the CEO of BhSE with the approval of Sebi. My tenure as the CEO has been extended till February 2014,” said Biswal.