The Telegraph
Since 1st March, 1999
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City brokers on strike for life-saving package

Calcutta, Nov. 14: Stockbrokers in Calcutta begin a seven-day strike tomorrow to protest against the “step-motherly attitude” of the Securities and Exchange Board of India — the capital market regulator — towards regional bourses.

Many of the 23 stock exchanges in the country have either closed down or have had no trading for months because it is no longer viable to buy and sell shares when the scalded retail investor has dropped out of sight.

The only survivors in the game are the brokers in the two exchanges in Mumbai — the Bombay Stock Exchange and the National Stock Exchange — which handle a great deal of institutional trades.

Brokers are upset with the exceptional delay in finalising a roadmap for demutualisation of stock exchanges — most of the exchanges in the country were formed as associations of brokers — which would enable the bourses to corporatise and become satellite members of those in Mumbai.

The other gripes are over Sebi’s dithering on the Kania Committee report, which had suggested ways to buoy the fortunes of the regional stock exchanges, and the market regulator’s refusal to relent on the withdrawal of turnover tax that it slapped on brokers.

This is the second time that the brokers in Calcutta are going on a strike. The last time was in 1991 when Sebi had mooted the contentious issue of turnover tax. This led to bourses across the country closing down for a week. The decision to go on a strike was taken today unanimously after the Calcutta Stock Exchange’s annual general meeting, which was adjourned for a week.

The chairman of the bourse, Supriyo Gupta, called off the meeting after brokers refused to approve the accounts. As a consequence, none of the other resolutions on the agenda was discussed. The meeting has been rescheduled for November 21.

Brokers have demanded an audited statement of the exchange’s Settlement Guarantee Fund (SGF) and the general reserve. The exchange had to dip into these reserves to meet the payment shortfall in March 2001. It has been one-and-a-half years since, but the exchange has not been able to produce an audited statement of its general reserve and the SGF yet. Sarkar said the SGF and the general reserve were being audited at last.

It is ironical that Supriyo Gupta, the chairman of the exchange, was the chairman of UTI Bank previously and P.K. Sarkar, the CSE executive director, was formerly the chief financial officer and the deputy managing director of the country’s largest nationalised bank — State Bank of India.

The bourse’s administration revealed its soft underbelly today by calling in police to patrol its annual general meeting and barring the media from entering the hall where the annual general meeting was held — the first time in its chequered 125-year history.

Although the executive director of the exchange yesterday denied seeking any protection from the police, they had written to the Hare Street police station seeking protection.

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