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Bhubaneshwar gets the stick

Mumbai, Jan. 4: The Securities and Exchange Board of India (Sebi) has superseded the board of Bhubaneshwar Stock Exchange (BhSE) and appointed retired IPS officer J.P. Verma as its administrator to ensure integrity of the bourse and protect the investors.

The management council of BhSE had failed to ensure proper governance, implement Sebi directions and bylaws. It is superseded by an order dated January 3 and an administrator will exercise powers and perform duties of the bourse board, Sebi said in a release here today.

The regulator had received complaints from several members of Parliament and Sebi nominee directors regarding siphoning of funds to the tune of around Rs 1.30 crore through the Bhubaneshwar Stock Exchange Members Welfare Trust Fund.

“The exchange failed to adopt accounts for 2000-01 and 2001-2002, indicating financial mismanagement. Accounts for the year 2001-2002 are yet to be adopted,” Sebi said.

In view of serious deficiencies, the market regulator had issued a notice to the BhSE council as to why it should not be superseded. However, the BhSE council did neither rectify the deficiencies nor address the issues, Sebi said. The regulator also found that conflict among various functionaries of the bourse was still in existence.

Later, following an inquiry BhSE was asked to take corrective steps and the regulator undertook an inspection on August 29 last year, but did not find much improvement in the bourse’s functioning.

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