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Suits for default -- CSE gets feelers for out-of-court settlement

Our Bureau

KOLKATA, July 1

THE Calcutta Stock Exchange, which has so far filed eight suits to recover dues from defaulters, has received feelers from certain defaulting parties on the possibility of working out out-of-court settlements.

CSE's lawyers, Sanderson & Morgan, in at least one or two cases, has already discussed the issue of settlement with the parties concerned. The exchange, however, would not like to disclose their identities at this point. Nor would it like to make a claim as to the amount of money that could be involved in such settlements.

The CSE governing committee at its meeting reviewed the issue of recovery of dues. This information was given to newspersons by Ms D. Raval, Executive Director of the Securities and Exchange Board of India (SEBI) and its nominee on the CSE governing comm ittee. Mr Dipankar Basu, Chairman of CSE's management sub-committee, confirmed this.

Both felt that the possibility of out-of-court settlements was a positive development, quite in sync with the attachments that the court had granted CSE before judgement.

CSE has received the SEBI inspection report on the March crisis. In view of the findings of the report, CSE has asked SEBI whether it will be required to file its final report on the causes of the debacle, Mr Basu said.

It may be mentioned that twice the CSE governing body asked the management to revise/modify the draft report. It is learnt the report has undergone revision/modification. In view of the forthcoming visit of the Joint Parliamentary Committee to Kolkata in the second week of July, finalisation of the CSE report assumes significance.

The meeting, held a day before the July 2 deadline that would mark the end of badla, took special note of the carry-forward positions. Whatever carry-forward remained on CSE would be liquidated and taken as delivery, Ms. Raval said.

CSE, which was banking strongly on its proposal to create a subsidiary for derivatives, has discussed the issue with both the National Stock Exchange and the Bombay Stock Exchange. It has also sent in an application to the Registrar of Companies for rec ording the name of the proposed subsidiary.

CSE, Ms Raval said, would like to get feedback from the two exchanges with particular reference to issues such as capitalisation and expenses that might be involved in the formation of the derivatives venture.

CSE, according to Mr Basu, would like its members to familiarise themselves with derivative products. With that end in view, the exchange has proposed to run familiarisation programmes.

In its bid to create more awareness about derivatives, CSE is considering tie-up with NSE, which in recent times has managed to build up considerable resources on the subject.

CSE has also sent feelers to the Indian Institute of Management, Calcutta, for similarly accessing its resources. IIM-C's first reaction has been positive, Mr Basu stated.

It was felt that efforts such as these would finally help attract enough participants in the new segment. ``We hope to provide brokers with a decent platform for derivative products,'' he said.

Mr Supriya Gupta on CSE team

The exchange has inducted Mr Supriya Gupta, former Chairman and Managing Director of UTI Bank, on the governing committee and management sub-committee. Mr Gupta replaced Mr Roopen Roy of PricewaterhouseCoopers, who had resigned earlier citing personal reasons.