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Tuesday, Oct 26, 2021
Outlook.com

Carving Up The Broking Cartel

SEBI gets professionals to take on the BSE old guard

Carving Up The Broking Cartel
Carving Up The Broking Cartel
outlookindia.com
-0001-11-30T00:00:00+05:53

AS the new governing board at Dalal Street's Jeejibhoy Towers gets ready to celebrate BSE's 125th anniversary next year, its mandate is clear: shape up or ship out. With market watchdog SEBI deciding to get the old guard out, BSE president J.C. Parekh has received his marching orders. Observes D. Vakharia, a BOLT (BSE Online Trading) trader: "Sacking Parekh was unfortunate, but the message is clear. For the first time, SEBI has thrown an open challenge to the old boys' network which has been running the premier stock exchanges like its personal fiefdom."

SEBI has gone on the attack mode since March 11—the last day for submitting applications for the election of governing board members—when it intervened by introducing changes in Rule 100 of the bourse's bylaws. This enabled even a fresh corporate member to contest the polls and enter the board. The elections were held to replace the board members retiring on March 31: M.G. Damani, former BSE president, Jayesh Sheth, director of Kantilal Chhaganlal Securities, Padmakant D. Shah of Padmakant Devidas Securities and Rajendra Banthia, former vice-president, who had stepped down from his post for his alleged involvement in price manipulation a few months ago.

The election result, which divided the exchange evenly between the old guard and the new, probably reflects the way SEBI's gauntlet has been accepted by the broking fraternity. The old-timers include Bhagirath Merchant, Madhukar Sheth, Jayesh Sheth and Bhanu Kumar Fozdar, while the Young Turks comprise Himanshu Kaji, Dinesh J. Shah, Cyrus Shroff, Motilal Oswal, Ameet R. Dalal and Rajendra Prasad Jhunjhunwala. Merchant, a former president, polled the maximum votes (251), followed by Oswal (248), Jayesh Sheth (211) and Kaji (210). Says a broker: "Unlike the traditional Gujarati-Marwari contest so far, this time...

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