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Sebi suspends UP bourse board

BS Markets Bureau

The Securities and Exchange Board of India has suspended the board of Uttar Pradesh Stock Exchange on Friday, and has appointed M N Sabharwal, IPS as the interim administrator.

Sebi had issued a notice on September 3, 2001, to the bourse board asking why it should not be superseded.

Two opportunities of hearing were given on November 19, 2001, and March 15, 2002.

Thereafter Sebi vide its letter dated March 26, 2002 called upon the UPSE to comply with the conditions mentioned in the letter and submit a compliance report within one month failing which it would be constrained to take such measures as it deem fit including supersession.

Subsequently, Sebi vide its letter dated May 17, 2002, informed UPSE that since the undertaking given by the UPSE pertaining to the conditions as directed by Sebi in its letter dated March 26, 2002 were found to be un-satisfactory, SEBI would be constrained to take action against UPSE which may include supersession of the board of UPSE.

However, the Board of UPSE did not rectify or address these issues. The watchdog said it had received several complaints from public representative directors of the bourse.

Earlier on June 27, the regulator had asked the president and vice-president of UPSE to demit office and also ordered the executive director of the bourse to cease working with immediate effect.

H K Garg, the president of UPSE had then said that the board will abide by the regulator's orders.

But the board did not agree with the Sebi order on the executive director. Garg said it was a wrong order and that the board had already written to Sebi stating it did not have anything to do with the appointment of the ED.

Prior, to this the UPSE broker's association had gone to the high court and obtained permission to do after-trade settlements, as was permitted by Sebi for the Bombay Stock Exchange. The regulator had then disallowed the request by the bourse on this score.

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