CSE brokers move high court over guarantee fund

Lyons Range members have decided to move Calcutta High Court challenging the Calcutta Stock Exchange's (CSE) move of deducting the cash component of their contribution towards the settlement guarantee fund (SGF).

The decision to take legal recourse was taken in a meeting yesterday after CSE deducted cash portion of the members' SGF, which was Rs 2.5 lakh for old members and Rs 7.5 lakh for new ones, nearly a month ago. The deduction was made to adjust the payment shortfall of Rs 25 crore that occurred in 2001, CSE sources said.

The development gained significance in the light that brokers were initially reluctant to make a joint move due to mutual mistrust prevailing among them. However, a section of the Lyons Range would possibly keep them aloof from the legal battle.

Talking on behalf of the broking community, S K Kaushik, a CSE member, said the brokers had initiated the process of taking legal recourse against CSE. A petition would be filed with Calcutta High Court shortly, he said. Kaushik said the brokers were upset with the authorities' decision. What more, the authorities denied to even talk to them on anything related to the issue, he alleged.

"Our repeated attempts to get a receipt of the deduction, so that we would get tax benefit, failed, " he added.