ACT 1: March 8, 2001, 11 AM
Lyons Range members are busy speculating on whether the Calcutta Stock Exchange (CSE) will be able to sail through the settlement, to be rounded up in the afternoon. The entire country is keeping an eye on the development in Kolkata because any shortfall here may snowball into a bigger countrywide crisis.
ACT 2: same date, same time, a year after
Newly-appointed CSE executive director meets the Sebi chairman to discuss the revival plan of the exchange. (The meeting, obviously, is officially defined as courtesy meeting).
So what went wrong with the exchange that reduced it to an ailing bourse from a lively one within a year? The answer, if you put it straight, is the March payment crisis.
The crisis robbed over Rs 100 crore from the Lyons Range members officially (plus, another few hundred crores outside the purview of the exchange). Initially, it was detected that the crisis was of Rs 122 crore which later came down marginally.
The main defaulters -- Dinesh Kumar Singhania, Ashok Poddar and Harish Chandra Biyani -- still owe nearly Rs 100 crore to the exchange.
This defaults were followed by a series of developments: the elected board stepped down, the Sebi appointed a supervisory body under the chairmanship of former SBI chairman Dipankar Basu, resignation of Roopen Roy, director, Pricewaterhouse Coopers from the supervisory board, and lastly, the Sebi-directed order sacking the executive director a few days before his tenure was to end.
In the meantime, it was detected that there were some serious lapses in the margin-collection mechanism and the Joint Parliamentary Committee (JPC) was appointed to investigate in the share scam.
JPC chairman announced in a press conference that managerial lapses, coupled with faulty margin collection system, brought the exchange to its knees.
There are some questions which remain unanswered. One of them is: why the Sebi representative, who was regular in visiting the bourse, did not notice the lapse in the margin-collection mechanism.
The bottomline is that CSE has been pushed to a situation from where revival seems tough. The situation has turned worse mainly because of lack of guidance in the last few months. There was no full-time executive director before the leaving of Tapas Datta and joining of P K Sarkar recently.
Lyons Range members are certain that the current phase of neglect will lead CSE to nowhere. Only a handful of stocks are actively traded on the bourse. Kolkata brokers are earning their livelihood mostly from trading on the National Stock Exchange.
A section of the brokers advocate that CSE should immediately be merged with NSE, while another section opposes and says introduction of derivatives can do the magic. However, most of the CSE officials support the independent exchange model.
