HC decision on UP bourse likely on May 22

The battle for supremacy in the UP Stock Exchange between brokers, on the one hand, and the administration, on the other, has got reduced to a series of court cases.

The brokers' association has moved the Allahabad High Court for directions to Sebi to hold elections to the board of the stock exchange.

The suspended executive director, KC Pandey, has won an important battle in court because the court has ordered he be paid the salary due to him for the period of suspension.

The court has also granted a stay, restraining the UPSE from taking any action against him on the basis of an enquiry report submitted by an enquiry officer, till further orders. The new enquiry officer has not found merit in the financial charges levelled against Pandey.

The brokers association through its secretary and president has filed a suit against Administrator MN Sabherwal in the local magistrate's court under Section 404 and 406 of CrPC, charging him with "financial impropriety".

Administrator Sabherwal told Business Standard he could not say very much on this score, as the cases were sub-judice. But he said everything was done with the permission of Sebi. He denied that Pandey's salary due to him under suspension was ever held back.

Meanwhile, Sabherwal has been given another extension of six months till the end of September this year.

The reason given by Sebi for the extension is that the notification says the Sebi inquiry has shown that the comprehensive risk management framework revealed certain weaknesses in the surveillance system, including non maintenance of base minimum capital and non-recovery of margins at appropriate levels.

However, the brokers do not agree. They say capital adequacy is not maintained only by non-working brokers.

Sabherwal said, "I shall ensure that a board gets constituted during this period and elections cannot be held unless and until there is an executive director in place."

The High Court decision is expected on May 22 on Pandey's reinstatement as executive director will be crucial to the ultimate outcome of the battle between the brokers and the administration.