CSE crisis continues, Rs 500 cr loss in illegal badla

CSE crisis continues, Rs 500 cr loss in illegal badla
ENS ECONOMIC BUREAU

Kolkata/Mumbai, March 14: The Calcutta Stock Exchange 40-share index recovered 81 points on Wednesday but the pay-in is likely to be extended till Saturday (March 17) instead of the scheduled date of March 15, indicating that the payment crisis is still plaguing the exchange.

However, two crucial counters -- Himachal Futuristic and DSQ Software -- again hit the lower band of the circuit filter. These two figured among the top 10 losers on the exchange Wednesday. Despite the CSE-40 index closing at a higher level of 1897.21 points (up 81.75 points than the March 13 closing), the unofficial badla market (popularly known as the number two account) is understood to be in tatters with losses estimated at Rs 500 crore plus.

Top brokers told The Indian Express that the pay-in problem of the March 8 settlement (number 2001148) is still continuing. They reasoned that, as a rule, the pay-out cannot be completed until the pay-in is cleared. Despite the market picking up, brokers were apprehending a Rs 250 crore-Rs 270 crore shortfall on pay-in day on March 15, in case funds are not mobilised.

None of the CSE officials were available for comment on the pay-in situation or on the suspension of the defaulting broker and former CSE president DK Singhania. In fact, there were rumours that Singhania had been suspended by the exchange.

HFCL counter opened at Rs 230.50 at the local bourse, hit the circuit filter and closed at Rs 193.70. However, volume-wise HFCL had one of the highest turnovers at the exchange.

DSQ Software opened at Rs 148.30 on the CSE and moved up, but later slid to hit the lower circuit filter and close at Rs 124.60. Volume-wise DSQ Software's was among the top 10 at the CSE.

It is understood that the reported Rs 30 crore shortfall on rolling settlement has been cleared. Brokers also said that there is likely to be a hiccup on the forthcoming pay-in on March 15.

Market sources said that brokers are in the process of arranging funds which will see the forthcoming settlement through. However, there could be a delay in fund mobilisation and the pay-in could be extended till March 17 (Saturday).

Reports doing the rounds at the CSE noted that the net outstanding carryforward at the HFCL counter was 26,62,300 shares valued at close to Rs 80 crore at Rs 370 per share. DSQ Software has a net outstanding carryforward of 23 lakh shares valued at Rs 51 crore.

One aspect the brokers are unanimous about is that, the CSE management should have been more vigilant and probably could have restricted the dimension of the crisis. They feel that the CSE management that there was a failure in margin collection which led to the snowballing of the present crisis.

They say that the margin collection should have been made on a daily basis so as to restrict the extent of shortfall.

The CSE management has between Rs 75 crore to Rs 80 crore (Rs 69.32 crore as on March 31, 2000) in its trade guarantee fund which will be debited in case of a shortfall. President Kamal Parekh had earlier assured that CSE has around Rs 500 crore by way of margins, deposits and TGF to meet any exigency.

Big bull Ketan Parekh had reportedly backed out from a deal to bail out Calcutta brokers, raising fears of another mega payment crisis involving an amount of Rs 500 crore.

According to market sources, the big bull had reportedly struck a deal on Monday morning with Calcutta brokers to pick up one crore shares of Himachal Futuristic (HFCL) at a price of Rs 525 per share. However, the big bull -- who is said to be finding the going tough -- is believed to have backed out of the deal later in the afternoon.