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Friday, December 28, 2001

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CSE members' bid to avoid contest at poll

Jayanta Mallick

KOLKATA, Dec. 27

THE broker members of the Calcutta Stock Exchange today, at a meeting, worked out a strategy to avoid contest at the forthcoming election on December 30, for constituting a full-fledged governing committee on December 30.

As per the strategy to be adopted, nine directorial berths would be filled up by the nine uncontested candidates from among the 15, who have already filed their nominations. Mr Ajit Day, former president of the exchange, told Business Line that it was ag reed at the meeting that six members would withdraw their nominations. Brokers further decided that the proposal for forming a corporate body of the members of the exchange will be shelved. ``We are considering formation of the forum under the registrar of societies instead", Mr Day said.

Tentatively called Calcutta Stock Brokers' Association Ltd, the body, which had sought certain executive powers in running the management of the exchange as per the objective clause in the proposed articles of association, will now have to accordingly mo dify scope of operation.

In the context of the proposed demutualisation, the brokers of CSE had sought to retain some powers as owners of the exchange through the provisions of the Companies Act, 1956.

However, the Company Law Board sought no-objection certificate from the CSE as it felt that the objective of the proposed corporate body (under Section 25 of the Companies Act) of the brokers would infringe into the domain of the CSE, which is also a com pany formed under Section 25.

It is learnt that the CSE management has raised a number of objections to formation of the brokers' forum as a corporate entity.

According to observers, even though brokers avoided confrontation with the current CSE management for the time being, the induction of nine directors on the management committee after December 30 may cause a stand-off between the public representatives a nd SEBI nominated directors. It may be pointed out that the articles of association of the CSE confers enormous executive powers on the president and vice-president of the exchange.

Until the present articles of association is superseded through appropriate statutory steps, either by the SEBI or by the Centre, powers of the elected directors and the elected president and vice-president cannot effectively be curtailed.

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