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Refco's Indian arms told not to increase market exposure

Our Bureau

Mumbai , Oct. 15

TWO Indian affiliates of Refco, the troubled global financial services firm, have been asked by Indian stock exchanges not to increase their exposure both in the capital and derivative segments of the market.

These two affiliates — Refco Sify Securities and Refco Capital India Pvt Ltd — are members of the capital market and derivatives market segment of the Bombay Stock Exchange and National Stock Exchange.

Earlier this week, the US-based Refco Inc ran into trouble after the company disclosed on October 10 that its former Chief Executive Officer, Mr Phillip R. Bennett, covered up to $430 million in bad debts. In the US, Refco has started shutting its securities brokerage business. In the US, Refco is a leading commodity broking firm.

In separate statements, BSE and NSE said the Indian entities of Refco had been advised as an interim measure not to increase their exposures in both the market segments till the implications of the news pertaining to the international entity were factored in.

The statement further said that currently the collaterals as available with the exchanges and clearing house cover the exposures of these Indian entities to the exchanges.

Meanwhile, Refco Sify Securities in a statement said that it was not affected by the developments at Refco Group in the US.

"Our operations are not affected by the developments in the US and it is business as usual. Our customer funds are all segregated from the operations of the Refco group in the US. We have more than enough funds to continue our business and maintain our services," said Mr Vineet Bhatnagar, Managing Director, Refco Sify.

In order to insulate the company completely from the developments at Refco group, the board of directors of Refco Sify had passed a resolution that no funds would be remitted to any of the Refco group's overseas entities, the statement said.

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Refco's Indian arms told not to increase market exposure

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