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JPC may call on promoters to depose

BS Markets Bureau

The Joint Parliamentary Committee is likely to call on promoters to give evidence as witnesses when the panel begins its next round of investigations by the second week of the monsoon session of Parliament.

Briefing reporters after a meeting with the Bombay Stock Exchange and Securities and Exchange Board of India officials, JPC chairman Prakash Mani Tripathi said that calling corporates and promoters cannot be ruled out and if it was found necessary then they would also be asked to provide evidence. The interim investigation report by the Sebi indicates evidences of insider trading by some prominent corporates. "The committee will decide on this," said Tripathi.

In the second week of monsoon session, the JPC members would be getting down to business calling "institutions and then individuals to give evidence as witnesses," said Tripathi, pointing out that this would then form the basis for their investigation into how the scam took place and what led up to it. "Thus far it was technical briefings to understand how the system worked," he said. The institutions to be called will include the Unit Trust of India, Sebi, Reserve Bank of India, and the stock exchanges. "The individuals' list would be a dynamic one depending on who is required to be called," said Tripathi.

The meeting with Sebi officials (mainly chairman D R Mehta) focused on how the securities watchdog is regulating the activities of stock exchanges, the information flow between various intermediaries, the surveillance activities and what needed to be done in the future. Tripathi said that some suggestions were made on standardisation of rules, bye-laws and procedures in the major stock exchanges especially in relation to the information sharing system with Sebi and Reserve Bank of India - "so that the system does not lend itself to irregularities frequently," said Tripathi.

Earlier in the day, the BSE officials made a presentation to the Sebi members regarding the automation process in the exchange as well as the security systems in place for small investors. "At the moment we are not in a position to pass any comments about the workings of BSE," said Tripathi.

The committee also took note of the effect that automation would have on the small exchanges while the impact of rolling settlement on the markets was made clear to the members.

The committee also met some prominent brokers such as Ramesh Damani, K R Choksey who said that the entire broking community should not be condemned due to a few rogue traders. They also suggested that rolling settlement and weekly settlement should exist together for sometime so that transition to the new system is smoother.

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