After the mud-slinging and street fighting, BSE is now making a belated move to patch up with SEBI. Part of this realisation was the election of Anand Rathi as BSE president. Until last week, the race was between Deena Mehta, who was to take BSE into the new millennium as its first woman president; and Bhagirath Merchant. So close was the race, that every vote counted and sacked president Jasubhai Parekh was persuaded to move court once more, in the hope that he may be allowed to vote. One of the contenders, even threatened to break convention and force the full board (including public representatives) to elect the president since no consensus seemed to emerge. Finally, Rathi came through with almost no contest. The brokers apparently realised their blunder in having attacked SEBI. Rathi not only presents a corporate image, but is also very close to the SEBI chairman D. R. Mehta and often accompanies him on his morning walks. Rathi's mandate would also ensure that thereis no move to scrap the existing system of broker presidents and to install independent professional management on all bourses.

The numbers confound

Eight months after the June payment crisis, some basic numbers are still not clear and the brokers' public utterances are worsening the picture. For instance, the BSE President and Executive Director (ED) are on record saying that the potential default could have been Rs 1,000 crore; SEBI, however, says that the problem was not more than Rs 60 or 70 crore. Nobody knows the size of the problem. If the BSE number is correct, it shows complete absence of surveillance on the exchange. If SEBI is correct, it shows that the BSE's actions in opening the trading system were not aimed at saving the market, but 20 specific brokers. After all the BSE chief had himself admitted that the Trade Guarantee Fund had Rs 80 crore of cash and Rs 265 crore in bank guarantees. This means that the BSE did not touch the funds only because of the precondition that the brokerswould have to be declared defaulters first, which it refused to do. Finally, BSE-friendly brokers say that around 100 brokers were in trouble last June. This is roughly one-fourth the number of active members on the BSE. If this is true, it makes another strong argument for superseding the BSE board and installing professional management.

Fit and proper?

While the BSE problem rages on, SEBI has suspended the membership of the Uttar Stock Exchange President for three months. In his capacity as broker, he was apparently indulging in illegal badla trades, not maintaining books of accounts, not rectifying bad deliveries, using the bourse's mechanism to settle loan transactions and not routing client transactions through separate accounts. Yet, the man has apparently not been asked to step down. Is it SEBI's contention then that the said president T. N.Bansal is `a fit and proper person' to head a stock exchange? Can election by a set of brokers be the only qualification to hold such a powerful post?Clearly SEBI needs to take another look at its rule book.

World Cup bottomlines

Cash in on cricket is the theme for the season, as big business hypes up the World Cup into an event to rival the new hysteria over Valentine's day. Candy companies have been replaced by big business peddling mushy patriotism and gooey `all the best' messages. The SJM would be happy to note that it is MNCs rather than desi companies who are leading the way. As far as advertising goes, it seems `Britannia khao World Cup jao' all the way. Shop keepers are piling up cartons of empty wrappers as little kids chomp their way through loads of bread and biscuits. For once, the cola rivals have taken the back seat as Britannia seems racing ahead to win the advertising world cup, even before the first game begins.

Authors' e-mail: suchetadalal@yahoo.com