UTI helps CSE to tide over payment crisis
BSE official refuses to lose sleep
Sethia makes open offer for 20% more in IFB Sec
Modi Network to beam Nimbus channels

Calcutta, March 10: 
The payment crisis on the Calcutta Stock Exchange has temporarily blown over, courtesy the Unit Trust of India and four brokers.

Sources said UTI has invested around Rs 30 crore to pick up 13 lakhs of DSQ shares at “current market price”. The four brokers have together rustled up Rs 40 crore to pick up shares of a couple of companies, including 30 lakh shares of Himachal Futuristics.

UTI top brass, however, was unavailable for comment.

A CSE release later said the pay-in and pay-out process amounting to Rs 326 crore for the settlement number 2001148 ending March 1 has been successfully completed.

While the crisis has been resolved for the moment, market operators feel the crisis may again come up on the next clearing day which is slated for March 15.

Speaking to The Telegraph,CSE president Kamal Parekh said, with the completion of the settlement there was no payment crisis on the bourse.

“Moreover,” he said, “the exchange did not have to touch the trade guarantee fund to meet the payment.”

Parekh said there was no payment default as such by any of the exchange member. “Only thing is that there was some delay in payment which is not unusual,” he added.

CSE executive director Tapas Dutta said the exchange had “placed” securities worth Rs 70 crore to financial institutions and a few brokers to meet the payment commitment.

Dutta, however, refused to name the brokers or the institutions who have taken the shares.

“The shares were not pledged, but placed to raise the required fund for payment,” he said.

Thus, the brokers, who were “delaying” in taking delivery of the shares they bought do not have any liability to the exchange, he added.

Though the official position has been squared off by placing shares, sources said the payment crisis has deepened in the unofficial badla market.

Conservative estimates suggest that payment obligations outside the ambit of exchange range between Rs 300-500 crore. As a consequence, the unofficial badla rates have also gone up to over 30 per cent compared with an average official rate of 10 per cent.

“Although the unofficial trade does not have anything to do with the exchange, at least directly, the crisis is certainly going to have an adverse impact on the stock market if the situation is not corrected soon,” sources said.

All the committee members of the exchange swung into action on Friday when the payment shortfall of around Rs 96 crore came to light.

Incidentally, CSE’s official payment for settlement number 148 did not go through on Thursday.

This was the first time ever that a payment on the number one account of the bourse failed to get over on the appointed day. The payment crisis had forced the authorities to keep the exchange open on Friday despite Holi.


Mumbai, March 10: 
The Bombay Stock Exchange (BSE) is not unduly worried about the payment crisis on the Calcutta Stock Exchange.

Speaking to The Telegraph, BSE executive director A.N. Joshi said his exchange till Thursday has collected margins amounting to Rs 2400 crore, which is 53 per cent of the total exposure in the market. According to a rough calculation, the outstandings on BSE will be to the tune of Rs 4500 crore.

While admitting that March 15 would be crucial for the exchange, Joshi said, “almost half of the Rs 2400 crore collected as margins are in the form of cash or near cash like fixed deposits,”

“The other half of the margins contain a substantial portion of bank guarantees,” he added.

Joshi was not willing to talk about the outstandings of specific brokers but said his exchange collected almost Rs 900 crore with Rs 30-40 crore accruing from margins arising out of the rolling settlement. The margins were collected from over 300 brokers.

Sebi followup

The Securities and Exchange Board of India (Sebi) is to examine in detail the payment crisis on the Calcutta Stock Exchange (CSE) that triggered off a crash across bourses in the country, senior Sebi officials said here today.

“The problems about payments at CSE have been solved and difficulties were blown out of proportion. This instance (payment crisis) needs a follow-up,” Sebi EBI sources said.

They, however, refused to say whether the “follow-up” would be an independent probe or part of the on-going investigations by Sebi into the March 2 stock meltdown and alleged price manipulation on BSE. The CSE officials have assured that the next settlement would be completed without any problem, they added.

The Sebi surveillance team was still working on the transcripts of conversation between BSE top office bearer and staff member in exchange surveillance department.

The investigations into March 2 crash were in full swing despite the severe shortage of staff, they said.


Calcutta, March 10: 
IFB Securities, the first Indian broking firm to venture into New York six years back, is being taken over by Siddharth Sethia, an unknown face in the stock-broking community.

IFB quietly sold off a 40 per cent stake in the company at an undisclosed price to Sethia last month. What’s more, Sethia has made an open offer to the public to buy 20 per cent shares at an incredible price of Re 1 per share.

There have been some queries for the shares which almost stopped being traded on the stock market for over a year now. But hardly anyone has shown any interest to sell the shares.

Promoted by Bijan Nag of the IFB group and Ajit Day of Dayco Securities, IFBS was the first Indian member of the Nasdaq through a joint venture with Cantor Capital Corp of the US. One of the first to have secured corporate memberships in the National Stock Exchange, it was one of the few corporate broking houses to have made a Rs 4 crore public issue in 1994.

The NSE card is still valid but has not witnessed any operations in the last three months. The firm’s Mumbai office has been closed and only eight people are working in the Calcutta office which has lost its glory long back.

Day left the board long back, but still holds over 10 per cent in the company. “The lack of expertise had an adverse impact on the company. Moreover, you have to have patience, at least when the market is on a downturn,” Day said.

Day, who also was on the board of the US company, says the price, quoted in the open offer is a matter of great disgrace. “I don’t think anybody will sell his stake at this disgraceful price,” he added.

While Sethia was not available for comment, sources said it was the lure of the corporate card of the NSE that inspired him to takeover the shares. IFBS has membership of both the wholesale debt market and capital market segments.


Mumbai, March 10: 
Nimbus Communications Ltd, which is foraying into the broadcast business, has tied up with Modi Entertainment Network for the distribution of its channels.

The company, which is into the business of air time marketing and content supplier to television companies, has fixed a distribution target of 10 million homes in six months.

The distribution will be in free-to-air mode at the beginning and later on converted to subscription mode.

Nimbus Communications has firmed up plans to launch Showbiz TV, whose product offerings will comprise news and features of domestic, as well as, international showbiz on a 24-hour basis. Apart from this, it will feature movies, television, fashion, music, cricket, chat shows with celebrities, premieres and launches.

The company, which is now tapping the capital market with a public issue of Rs. 133.56 crore including a book building issue, has said, in the offer document filed before the market regulator, that the channel will be launched in the first quarter of the fiscal 2001-2002.

The company has finalised an agreement with Thaicomsat for utilisation of their satellite platforms.

Nimbus, thus, follows the trend set up by Sri Adhikari Brothers who have integrated into the broadcasting business after being a content supplier. However, their venture into broadcasting has not been greeted well by the stock markets, who point out towards the prevalent competitive scenario in the industry.

However, Nimbus Communications has explained that the venture into broadcasting follows its presence and experience in content creation, content acquisition, air time sales and management of the broadcast chain. It feels that adequate scope exists for speciality channels.

The public issue will part-finance Nimbus’ planned expansion of the existing business areas, including, media marketing, acquisitions and television content creation. Apart from these, it will invest part of the proceeds in its subsidiary, Nimbus Online Ltd. The proceeds will also fund its foray into motion picture production and music software releases.

The company is planning to invest in sports event management, production, acquisition, marketing and telecast of various events.

It has formed a joint venture with World Sport Group Ltd where each holds 50 per cent equity.

The venture will give live sports coverage/ production or distribution for television in India. It will also start production, distribution or sponsorship of cricket at a global level.



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