The Telegraph
Since 1st March, 1999
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CSE may lose Jawhar Sircar

Calcutta, Dec. 13: State industry secretary Jawhar Sircar is likely to step down from the board of Calcutta Stock Exchange (CSE). He is a Sebi-nominated independent director on the board of the beleaguered bourse.

Sircar said, “I am planning to step down because it is becoming increasingly difficult for me to find time for the exchange.” Besides Calcutta Stock Exchange, Sircar is on the board of 60-odd companies and institutions.

He had joined the bourse’s board at the end of last year. His departure would be a major setback for the exchange, which has kick-started the process of demutualisation.

What is more, Sircar has been instrumental in starting the police investigation of the payment crisis in March 2001. His exit from the exchange could also have a bearing on the ongoing probe.

However, he has not put in his papers as yet. The exchange’s management will persuade him to continue and it hopes he is going to relent.

Meanwhile, CSE has formed a working group of four executives to draw up a plan for the bourse’s demutualisation. The plan envisages evaluation of the exchange’s assets and a public issue of its shares.

The Securities and Exchange Board of India (Sebi) has given all stock exchanges six months time to turn themselves into ‘public limited companies’. The market regulator has already issued the guidelines for the transition.

“The process will start with an evaluation of the exchange’s assets for which chartered accountants will be hired. The exchange’s balancesheet does not indicate the fair value of our assets. For instance, when evaluating the property on EM Bypass, which CSE had obtained on lease from the state government, we must consider the revenue it can generate in future and not the cost to the bourse,” senior officials of the exchange explained.

This will be followed by issuance of shares to the brokers — the shareholders of the exchange. Some 1,200 brokers would receive shares of the exchange, though most of them have stopped trading on the bourse.

“Though initially the brokers would control 100 per cent stake in the exchange, we have plans of issuing shares to other investors through a public issue or preferential allotment to raise funds to promote the property on EM Bypass,” members of the working group said.

The market regulator says the demutualised bourses must issue shares to the public within three years. A public issue or a preferential allotment will not only lead to the dilution of brokers’ control, but also bring in funds.

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