At the governing board meeting on November 23, the exchange declared six brokers, including Shah, as defaulters. The other brokers--Kishore Janani, HV Shah, PJ Shah, Raman V Dalal, and ICP Securities--were declared defaulters on account of their failure to repay oustanding dues over the past two years amounting to Rs 1.87 crore.

All the brokers were debarred from trading for over a year. So, the exchange has decided not to use the trade guaranty fund (TGF) to settle investor greivances. Instead, it will auction their trading rights.

According to BSE president JC Parekh, Pankaj Shah had introduced a huge chunk of ITC shares besides other stocks into the BOLT system. The value of these stolen shares amounted to over Rs 1.5 crore.

Sources also hinted that a considerable chunk of these shares had reached Canbank in August thisyear.

Sources say a first information report was not filed against Shah, prompting a few governing board members to call for legal action. Some of these shares were stolen from the company while in transit to investors.

The governing board also approved sale of two defaulter cards previously held by the exchange. Both the cards, according to Parekh, were sold at an average price of Rs 1.11 crore. One of the cards was acquired by SBI Securities.