BSE clearing mess due to inefficiency

It may be recalled that a cumulative amount of Rs 114 crore worth of shares was detected as having been left undelivered to custodians despite payments having been made to the clearing house and the settlements having been completed. The issue snowballed into a controversy when the huge shortfall became public, leading to an inquiry into the matter by Sebi. The market was agog with rumours that the shares could have been stolen from the clearing house.This has, however, since been denied by BSE.

BoI Shareholding will have to shell out Rs 80 crore as the Stock Holding Corporation of India Ltd (SHCIL) has sought compensation for the delay in the delivery of shares.

SHCIL who acts as a custodian of shares for many institutions has recently moved the SEBI for the delay, and asked the regulatory body that BOI Shareholding should pay interest for the period of delay. The exchange should compensate the clients for any corporate benefit that they may have lost owing to their failure to lodge the shares with the registrars on time.

Market circles said the SEBI has asked a task force set up by the Bombay Stock Exchange (BSE) to sort out the problem by July 15, by reconciling all the deliveries by this date. The total shares still remaining to be delivered are worth less than Rs 9 crore now.

In a related development, the finance ministry has turned the heat on the regulator and sent a number of missives in the past week asking it for its comments on variousissues pertaining to the recent payments crisis and allegations of price rigging in some scrips.

A matter pertaining to rigging of Videocon and BPL shares is currently before the Bombay high court which has directed Sebi to furnish its investigation report in four weeks’ time.

Deutsche Bank and Citibank are two custodians which have still not received deliveries of some shares despite having made the payment. This shows that the issue does not pertain only to the Stock Holding Corporation of India Ltd (SHCIL) as earlier suggested.