Sebi extends BhSE supersession term

The Securities exchange Board of India (Sebi) has extended the period of supersession of the management council of Bhubaneswar Stock Exchange (BhSE) by six months.

On January 3 last year, Sebi had superseded the management council of BhSE for a period of one year and appointed JP Verma, a retired IPS officer, as the administrator of the bourse. The Sebi action followed allegations of financial irregularity and administrative mismanagement in the exchange.

While extending the period of supersession, Sebi has pointed out that the administrator had taken various measures to rectify the problems of the exchange which required sustained follow up action to resolve them.

"To further streamline the functioning of the exchange and in view of the additional time required to complete the process of election and constitution of the new council of management as also the process of demutualisation, I am of the considered view that the period of supersession of the council of management is necessary to be extended for a period of six months", the Sebi notification issued by its chairman GN Bajpai said.

"Moreover, the situation is not yet conducive for the council of management to take over", he added.

The notification said that JP Verma will continue as the administrator of the bourse and exercise and perform all the powers and duties of the council of management during the extended period of six months with effect from January 3, 2004.

Sebi had superseded the BhSE management council last year after it came to light that about Rs 1.3 crore had been misappropriated from the members' welfare trust of the bourse by some influential brokers in active connivance of the bourse officials.

The former president of the exchange TD Bhayana was the maximum beneficiary of the financial irregularity as Rs 40 lakh of the scam money had gone into the account of India Finance Guarantee Ltd (IFGL), a broking firm owned by him.

The administrator has since expelled Bhayana, who is currently behind the bars for his alleged involvement in the murder of a broker, from the membership of the bourse.

The bourse has also recently recovered Rs 10 lakh housing loan given to the former executive director, Jay Sadany, who has been put under suspension for his alleged involvement in the financial scam.

However, during past one year the exchange has run into problems with the Income Tax department which has attached fixed deposits of the bourse to the tune of Rs 4.71 crore, thus threatening its very survival.

The exchange authorities have gone in appeal against the action of IT officials in IT tribunal and the Orissa High Court.