The BSE seems to have jumped prematurely into the decision to go public taking the cue from the New York Stock Exchange. The result: a furore among its members and a quiet probe into who leaked the story. Since the leak, it is feared, goes right to the top, there have been no denials but no more follow-up reports either. Why won't the BSE go public in a hurry? Simply because it has to resolve many issues. First, it is an association and not a limited company with a share capital which it can offer to the public.

Secondly, nobody will buy shares unless the BSE proposes to work at being profit-making and dividend-paying, which its investments in the central depository and the trade guarantee fund have endangered. Also, if it is a profit-making company it will lose its tax-exempt status. Finally, if membership is delinked from ownership, it will not only devalue the BSE membership cards which have been guarded by members but will also create a different power structure: there willbe brokers who control management and those who won't. After all, the equity, according to the report, will first be offered to members.

Spinning off its debt

ICICI, which has announced a highly publicised domestic and ADR issue, has other plans up its sleeve. It has sought permission from the RBI and SEBI to spin off its holding of debt instruments into a mutual fund, with ICICI acting as the sponsor and the trustee. One of the regulators, however, said they would consider clearing it if only AAA-rated debentures could be spun off to the fund. ICICI, we understand, has now come up with the idea of guaranteeing the coupon on these debentures. The proposal has been around for some time but the regulators are not sure it will not turn messy.

However, ICICI, which will find it very beneficial to spin off its debenture portfolio before its mega issues, is pushing hard for a clearance. The regulators find some merit in the scheme, given that there is a growing demand for debt funds but has nigglingdoubts. The concept of debenture trustees, which pretended to secure investment, has already failed. Will the institution-guaranteed mutual funds be a new trend in assured return schemes?

The cash question

Last week an investor called to ask whether I thought that demat of shares was dangerous for investors and the market. When I said it wasn't, he got angry. He described a fanciful way in which brokers could copy investors' signatures and corner shares without leaving a trace and the genuine investor would be duped.

When I pointed out that paper-less trading has worked around the world without major lapses, he simply lost it. He'd rather believe the brokers who told him that demat was dangerous instead of checking out security measures with the depository. Finally, he blurted out his real problem. ``There have to be some amount of cash transactions in the market,'' he said, ``it cannot all be dematerialised.'' A-ha! That accounts for at least 40 per cent of the complaints with the depository.The clear audit trails of the paper-less mode make it impossible for black money to be invested in the market. For decades, the bourses and real estate were a safe haven for investing ill-gotten wealth. Transparency threatens to end the happy days.

Latur's diminishing dead

The earthquake in Turkey reminds one of Latur in 1993. For some strange reason, the number of official dead has quietly been lopped off by a massive 2000 plus. It started with a typographical error in some pamphlets of the Maharashtra government's earthquake rehabilitation department in July 1998 at the time of a presentation to the World Bank.

But even after the rehabilitation programme was wound up in July last, the official figure released is 7,928 instead of 9,783 the actual number released after proper scrutiny in 1993-94. If the false numbers continue to be circulated there is a good chance that the remaining persons who have yet to be paid compensation because the bodies of relatives were not traced, are unlikely to bepaid at all. If the officially verified figures can simply drop by 2,000 over five years, how reliable are other government statistics?

Author's email: suchetadalal@yahoo.com