CSE throws ED out of the ring
Negroponte puts India on Net achievers’ list
Telecom cases
RBI favours regulator for micro-finance
India on alert as China knocks on WTO door
BPL revamps board, two directors resign

 
 
CSE THROWS ED OUT OF THE RING 
 
 
BY A STAFF REPORTER
 
Calcutta, Aug. 11: 
Nearly five months after the payment crisis rocked the Calcutta Stock Exchange (CSE), heads have started rolling at the city bourse.

The first casualty is none other than executive director Tapas Datta whose service was terminated by the CSE board today.

Datta’s termination of service comes at a time when the management of the bourse has started probing the role of broker-directors in precipitating the payment crisis.

Dipankar Basu, who is the chairman of the CSE management panel, said: “The decision was taken at the board meeting today after considering Sebi’s inspection report and Datta’s explanations. The board and Sebi are of the view that there was lack of action on his part.”

Similar action may be taken against other officials of the exchange as well, he said and added that “the role of other senior officials in key departments like margin and surveillance will also be examined.”

Sebi has, however, held only the executive director responsible for the lapses in surveillance since the department reported to him, Basu said.

Allaying fears that the exchange will become headless, Basu said: “We will have an acting executive director for the next six months. By that time, we hope to find a new executive director.” N. Dasgupta, an advisor to the exchange, has been designated as the acting executive director.

The move has been widely criticised by CSE employees and members. They feel the market regulator and the CSE management made Datta the scapegoat.

Explaining why the CSE board took such a long time to take this decision, Basu said, “The matter could be discussed only after we received Sebi’s report a month back and Datta’s response to the charges, which came a fortnight later.”

Commenting on the delay in taking action, the Sebi representative on the CSE board, D.N. Rawal said: “We have not had time to discuss this matter before (in the last five months). We had our own priorities, and chose to avoid this matter till now. But today it was unanimously decided that Datta had to go because the board had lost confidence in him. Anyway, his term would have come to an end in September.”

Basu said, action will also be initiated against CSE’s software vendor, CMC, and IndusInd Bank, which is one of the clearing banks of CSE. “We have strong cases against both, and we will consider demanding compensation for their lapses,” Basu explained.

The bourse had blamed CMC for a bug in its software and IndusInd Bank for not reporting in time, bouncing of cheques issued by members who later defaulted. The bank claimed that it had informed former CSE president Kamal Parekh about the matter. Parekh, however, has always denied having been told about the bounced cheques.

The exchange has now asked the former president to officially clarify the matter. “Once we have his response on the issue, the CSE management will probe it further,” Supriyo Gupta , who is the vice-chairman of CSE management panel, said.

The fact that the decision regarding the executive director was taken even before the CSE management has determined the role of broker-directors has upset the employees.

Speaking on the bourse’s revival, Rawal said: “We want CSE to grow independently, and in line with that, we have decided to abandon our plans of merging CSE with the Delhi Stock Exchange (DSE). The merger with DSE has been discussed by the board before, but today we have decided not to explore the possibility any further.”

However, the exchange will create a subsidiary and take membership of the derivatives segment of the Bombay Stock Exchange (BSE). “We hope to sign an MoU with BSE next week,” Basu said. The exchange also plans to cut down on expenditure by reducing office space. This will save the exchange Rs 1 crore in rents. “We will spread CSE terminals to areas where other bourses have not reached yet,” Basu said.

   

 
 
NEGROPONTE PUTS INDIA ON NET ACHIEVERS’ LIST 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Aug. 11: 
Nicholas Negroponte, the man who was there at the birth of the internet in the 1960s and the inception of multimedia in the 1970s, is a visionary who is a little squeamish about making predictions. But he made two today at a CII forum for CEOs: over the next 12-24 months, internet users in India and the rest of the developing countries will overtake the number of internet subscribers in the developed countries. Secondly, machines will interact more with the Net than the humans.

“These are two developments which will come as a surprise to many,” said Prof. Negroponte, co-founder of Massachusetts Institute of Technology’s Media Lab which is due to set up its Media Lab Asia in Mumbai within a month. “First, in developing countries, the usage (of the internet) method will grow in a different way than people use it in the US and other developed countries. The growth will not be just statistical but also qualitative. Today, more than 50 per cent of the internet users are from developing countries,” said Negroponte.

“In developing countries, there are six subscribers to one internet account and those who compute the number of subscribers, have failed to factor this into account,” he said.

The MIT professor said, “Linking, and not thinking, will be the future. More Barbie dolls will be connected to the Net than humans since it is there that they will get the stories and also learn languages.” He also predicted that semiconductors (chips) would play major role in future lives. And they will flow into homes primarily through toys.

“Human interface with internet will be far less than the machines. The machines will interact more using the internet, primarily to enhance their performance,” said Negroponte

By machines, he did not mean laptops, TVs or other interfaces but machines such as refrigerators, which would be connected to internet to enhance their performances. Explaining with the example of the refrigerator, he said these could be connected to the Net to order inventory, to lodge complaints of malfunctioning or disorder to the manufacturers on its own.

He asked the telecom service providers to pick the right technology and make it affordable for mass acceptance. The technology is available but it is for the companies to economise the product. “Usually the cost should come down since technology allows you to do so much. India has the opportunity to take lead in embedded computing hardware sector,” said Negraponte.

   

 
 
TELECOM CASES 
 
 
OUR BUREAU
 
New Delhi, Aug. 11: 
The Supreme Court will hear a batch of transferred petitions (TPs) on Monday relating to telecom cases filed in various high courts of the country. The TPs filed by the central government (Union of India Vs. K.Chandra) are slated to be heard by a division bench of Justices V.N.Khare and B.N.Agarwal.

The Centre contends in the petition that different high courts might give differing verdicts and so it was in fitness of things and to meet the end of Justice the apex court heard them together and dispose them of finally. There are about five petitions in the high courts of Chennai, Mumbai, Delhi and Patna dealing with various aspects of bidding process for cellular and basic telecom licences.

   

 
 
RBI FAVOURS REGULATOR FOR MICRO-FINANCE 
 
 
FROM OUR CORRESPONDENT
 
New Delhi, Aug. 11: 
The Reserve Bank of India today favoured setting up of Self Regulatory Organisations (SROs) to monitor the micro-finance sector. “Micro-financial institutions need to function within a self-regulatory framework which will regulate and monitor the sector through peer pressure,” RBI general manager Deepali Pant Joshi said while addressing a seminar on micro-finance here.

Joshi said RBI has exempted non-banking finance companies, which are engaged in micro-finance and are licensed under Section 25 of the Companies Act 1956 and which are not accepting public deposits from the purview of RBI Act in case of registration, maintenance of liquid assets and transfer of profits to reserve fund.

   

 
 
INDIA ON ALERT AS CHINA KNOCKS ON WTO DOOR 
 
 
BY A STAFF REPORTER
 
Calcutta, Aug. 11: 
For the first time, the Union government is trying to discern the opportunities offered by the Chinese economy. The commerce ministry has decided to engage management consultants to conduct two separate studies to identify the threats and prospects emerging out of China’s possible entry into the WTO.

Speaking at a seminar organised by the Indian Chamber of Commerce here today, commerce secretary Prabir Sengupta said: “Applications from various leading management consultants have been invited to conduct studies on China. We hope to finalise the consultants in a month.”

Speaking on the Chinese economy, Sengupta said it had grown because it had always tried to cater to the world market. “While the Indian industry, until recently, had been catering primarily to the local market, the Chinese industry always had an eye on the world market,” he added. What has supported the growth in China is the low cost of capital, and the hidden subsidies that have been offered by the Chinese government, Sengupta said and added that he believed the volume of “hidden subsidy” in China was lower than the popular perception.

Commenting on the next WTO ministerial conference slated to be held in Doha (Qatar) in November, Sengupta said India along with other developing countries would try to raise the issue of implementation-related concerns which these nations were facing.

Saying that India wanted the Doha meet to be successful and not go the Seattle way, Sengupta said developing nations should try to pursue their interests first, and then sit down on other issues likely to be raised by developed countries.

The issues likely to be raised by the developed nations were environment, labour standards, agreement on investments, competition law, transparency in government procurement and trade facilitation.

Sengupta said although the focus of the developed countries would be to launch the new round of trade negotiations for further liberalisation, the developing countries would see that their concerns were satisfactorily addressed. Sengupta also allayed fears that the removal of quantitative restrictions (QRs) would lead to a surge in imports.

   

 
 
BPL REVAMPS BOARD, TWO DIRECTORS RESIGN 
 
 
FROM OUR CORRESPONDENT
 
Mumbai, Aug. 11: 
BPL Ltd, the domestic consumer electronics major, today announced board level changes in which Shashi Nambiar resigned from the directorship of the company.

BPL informed the stock exchanges that the changes, effective from July 23, saw Nambiar resigning as whole-time director, as well as L H Bhatia resigning as director.

Shashi Nambiar, cousin of chairman and managing director Shashi Nambiar, and Bhatia were co-opted in the company last year.

K Jayabharath Reddy, Suraj L Mehta and K S Jayanth Kumar have been co-opted as additional directors. Officials were, however, not available to comment on these board level changes.

   
 

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