In a latest controversy at the regional bourse, Vadodara Stock Exchange Limited (VSE), the investor directors of the exchange have allegedly asked the recently appointed managing director of the exchange to resign.
"I have been forced to resign. They (board of directors) threatened me to either resign or face a termination. Promoters don't want a costly MD. My appointment is for three years and within just three months they have realised that they can't afford me," said G Someswara Rao, who was appointed as MD of the regional stock exchange (RSE) by the market regulator Securities and Exchange Board of India (SEBI).
Two shareholder directors and public interest directors reportedly met at the VSE office on Tuesday afternoon to take the decision. Shareholder directors hold 51 per cent in the RSE, which is defunct for more than five years.
"This is an unlawful termination. They have been violating so many rules of the regulator. This is an addition to that. I will challenge this forceful termination by the VSE board of directors in the Gujarat High Court," Rao said.
"They have a language problem with me because I am not able to communicate in Gujarati or Hindi. These are trivial reasons for sacking me," the miffed Rao said.
Rao has previously served at other RSEs in the south India.
According to insiders, the directors cannot take a decision on sacking the MD of a RSE. "There is clear mention in the SEBI's regulations that the appropriate termination of the managing director shall be subject to the prior approval of the board. Also, MD enjoys the exclusive position hence SEBI has to be informed first," an official informed on condition of anonymity.
Notably, the last annual general meeting (AGM) of the exchange had to be adjourned amid heavy uproar and protest from the trading members against the appointment of chairman, Mukund Shah.
"The shareholder directors have been acting autocratically. They don't consult minority shareholders before taking any major decisions. The appointment of chairman was one such thing. And now follows the termination of the MD," said a VSE source.
Sources also revealed that the MD was planning to convene the adjourned AGM on October 12. "Also, a team of SEBI officials is likely to visit VSE on October 11," said a source.
However, when contacted the public interest director Mukund Shah denied the allegation made by Rao. "Rao has voluntarily tendered resignation on October 7," Shah said.
