Dull weather

Calcutta, Jan. 6: Members of the Calcutta Stock Exchange have resolved not to approve the bourse’s accounts for the last two financial years — 2001-02 and 2002-03 — at the annual general meeting tomorrow.

Members are up in arms against the management led by Sebi-appointed administrator Tushar Kanti Das that has mandated that they would have to pick up the tab for the Rs 120-crore payment shortfall in March 2001.

This would cost each member Rs 4.2 lakh, according to the exchange’s estimates. The bourse’s management proposes to deduct the amount from members’ security deposits and credit it to the depleted settlement guarantee fund.

Hundred-odd members have jointly written to the administrator, Tushar Kanti Das, opposing the decision. They said, investigations into the payment crisis revealed that a large number of trades honoured by the exchange were fraudulent, and hence members were not obliged to foot the bill.

“We would not allow the adoption of the account of the Calcutta Stock Exchange Association Ltd for the financial years 2001-02 and 2002-03 (unless the management could give a credible explain for its decision),” members said in their missive to the bourse’s administrator.

The last annual general meeting of the exchange was adjourned as members demanding an audit of the settlement guarantee fund stalled proceedings. The annual general meeting tomorrow is expected to be as turbulent as last year’s, which had revealed the exchange’s soft underbelly as the management moved to keep the media out and called in the police for protection. Lyons Range veterans had described it as “shameful”.

The exchange’s management has since had its settlement guarantee fund audited, but it has only added to its woes. The auditors remarked in their note to shareholders — the bourse’s members — that the settlement guarantee fund was used to pay off dubious, if not fraudulent, trades, whereas they should have been expunged (dishonoured).