MUMBAI, Jan 28: The Bombay Stock Exchange (BSE) has declared Summit Integrated Credit Capitals and S Jagannath Tibrewala as defaulters under the rules of the exchange. The decision to this effect was taken at the meeting of the exchange's governing board held on January 28.As per a press release issued by the exchange, four reasons have been cited for the above step, of which the non-payment of client dues in the form of arbitration awards and clearing house dues have been highlighted.
The exchange has decided to auction the two cards in order to recover the dues from the brokers. ``They cannot remain solvent for long. We used this period to reduce their total outstanding. Now with the sale proceeds we will recover the dues pending with the exchange,'' commented MG Damani, BSE president.
According to informed BSE sources, Summit Integrated has an outstanding liability of Rs 50 lakh and in the case of Tibrewala it stands at about Rs 74 lakh. Sources also hint at the fact that a huge chunk of baddelivery has been introduced into the market by Tibrewala.
These members were restrained from doing any further business on the exchange from March 27, 1996 and June 10, 1996 respectively by deactivating their terminals.
``This step was taken as a disciplinary measure,'' commented a BSE director. ``Their trading rights were deactivated on the basis of the surveillance related issues like that of margin cheques not getting favoured as well as arbitration awards not paid,'' he explained.BSE officials maintain that the exchange has ensured that the investors who were saddled with bad delivery from these brokers have been paid adequately as per the price at the close out. Since the trading rights were deactivated since 1996, the declaration will have no impact on the Trade Guaranty Fund. The exchange has asked such investors who have not claimed their arbitration awards to come ahead and submit their claims till March 15, 1998.
MUMBAI, Jan 28: I-Sec, the securities arm of ICICI, has offered the best priceof Rs 1.01 crore for the BSE card auctioned on January 27, but appears to have still fallen short of the desired amount for the card.
The card, which belonged to Suresh Damji Shah, received three bidders, of which I-Sec was rumoured to have quoted the best price.
Though sources at I-Sec maintain that they have not received any formal intimation from the exchange about the outcome of the tender placed about two months back, market sources maintain that their bid has not been accepted by the exchange.
According to market sources, since the previous card auctioned on the exchange fetched a sum of Rs 1.3 crore, the exchange authorities have fixed it as the `reserve price' for this auction as well.
The value of the BSE card has been falling substantially over the past few years given the intense competition among market players coupled with a sustained dull sentiment.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
