Kutch exchange CEO appointment irks investors

The appointment of the executive director (ED) and the chief executive officer (CEO) of the Saurashtra Kutch Stock Exchange (SKSE), has run into trouble as the city-based Investor's Association, has asked Sebi to cancel these appointments.

Satishkumar Nandangudi was appointed as the executive director while Tarang Mehta was appointed as the CEO of SKSE. The investor's body alleges that the decision was made by an illegally constituted selection committee.

"As a rule, for the selection of ED and CEO, prior permission of Sebi is imperative. But SKSE has clearly violated the rules and has taken no permission from Sebi for the constitution of the selection committee," said Ramji Mavani, founder member of SKSE and Investor's Association representative.

Only four brokers out of the eight committee members, were present when the interview and appointment of the ED was done. Sebi nominees were not part of the deliberations, Mavani said. Moreover, the brokers who were present during the selection process, were the ones who were trading rigorously with SKSE, he alleged.

"An advertisement of appointment for the posts of ED and CEO was published on November 28, 2005 and interviews were also conducted, but official permission from Sebi was sought under the pretext of appointing two CEOs," Mavani said.

In a letter dated December 28, 2005, addressed to the Union finance minister P Chidambaram, the Investor's Association representatives said they suspected that malpractices and clear-cut violation of Sebi guidelines took place during the time of the appointments.

"Last date for the applications to be received for the post of ED and CEO was December 12, 2005, but the application of Satishkumar Nandangudi who has been selected as ED, was received on December 14, 2005 and the application of Tarang Mehta, who has been selected as CEO, was received on December 15, 2005, which can be well tallied with the inward correspondence register," said Mavani.

Speaking on the issue, Nandangudi, one of the men whose appointment has caused a stir said, "After having experience of 20 years in the capital market, I never knew that my appointment would generate such controversial reactions. I had never ever opted for VRS. In 1999, when I resigned from SKSE, this money was paid as a token of appreciation for the work undertaken during my tenure. When SKSE was demutualised on December 14, 2005, Sebi guidelines clearly said that the ED and CEO can be selected by local stock exchanges. So, I do not think that any Sebi guidelines have been violated in my appointment as ED."

However, Tarang Mehta, CEO of SKSE whose appointment too is controversial was not available for comments despite repeated attempts.