SEBI orders Bombay Stock Exchange President to Resign

The Securities and Exchange Board of India (SEBI) has directed Jasvantlal C Parekh to relinquish the office of president of the Bombay Stock Exchange. The order was passed by SEBI chairman D R Mehta on March 23. The directive states that Parekh has also been made ineligible to hold any public position in future as a member of the governing board or as an office-bearer of the exchange as well as any capital market-related public institution for three years. The full text of the SEBI press release is "In the wake of payment crisis in the month of June 1998 on BSE and NSE and allegations of manipulations in the scrips of BPL, Videocon and Sterlite, investigations were conducted by SEBI. The functioning of the exchanges and their office bearers were also investigated. Pursuant to these investigations a show cause notice dated 10th February 1999 was issued to Shri R.C. Mathur, (Executive Director), Shri R.K. Banthia (Ex-Vice President) and Shri J.C. Parekh, (President). The show cause notice issued to the President was for his role in influencing the exchange administration and getting margins reduced, for getting the trading system opened beyond trading hours for selected brokers, for not keeping the Governing Board fully informed etc. SEBI after hearing the President has passed an order dated 23rd March, 1999 directing Shri J.C. Parekh to relinquish the office of the President of Bombay Stock Exchange. He has also been made in eligible to hold any public position in future as a member of the Governing Board or the office bearer of the exchange as well as any capital market related public institution for a further period of 3 years. Shri J.C. Parekh had filed a writ petition before the Bombay High Court challenging this order of SEBI and seeking stay of SEBI's order. The Division Bench consisting of Justice N.J. Pandya and Justice S.S. Parkar have dismissed the writ petition. However Shri Parekh has been permitted to continue as President till 31st March 1999, 11.00 am in order to enable him to prefer an appeal before the Appellate Authority, Central Government, if he so desires. The High Court has prohibited Shri J.C. Parekh from discharging any duties as a President and also prohibited him from attending the Governing Board meetings."