Panel questions bourses on rigging

MUMBAI, Aug 10: Even as industry captains made a strong pitch to the standing parliamentary committee on finance on Monday to help revive...

MUMBAI, Aug 10: Even as industry captains made a strong pitch to the standing parliamentary committee on finance on Monday to help revive the capital markets, the latter questioned the top officials of the Bombay Stock Exchange BSE, the National Stock Exchange BSE and the Securities and Exchange Board of India SEBI on the recent price manipulation by the former big bull8217; Harshad Mehta.

Expressing deep concern8217; over the extreme volatility in the stock markets, the committee has asked the BSE for more details on how the governing board had solved the payment crisis. The market regulator, SEBI, told the committee that a probe is currently on into the Harshad Mehta angle which is being undertaken on a priority basis.8217; 8220;We told the committee that a report would be soon be made available to them,8221; sources in the SEBI said.

On the other hand, the Bombay Stock Exchange has vehemently denied that any of its member brokers were involved in the pre-Budget rally on the stock markets. In a meeting with thecommittee members, top BSE officials in fact denied that there was any payment crisis at all on the stock markets!

Last Friday, the BSE and the NSE had received a 3-page questionnaire from the Lok Sabha Secretariat seeking details about the role of Harshad Mehta, volatility and the pathetic state of the markets. The 40-odd member committee, led by South Mumbai Member of Parliament, Murli Deora began its hearing today.

In another meeting, the committee met prominent industry leaders including Ratan Tata, Rahul Bajaj, Mukesh Ambani, Anand Mahindra, Deepak Parekh and Rajesh Shah, to discuss the issues pertaining to the Indian industry.

In his address, Bajaj said it is high time the government and industry worked as a team. Tata group chairman, Ratan tata told the committee that there has been a considerable corrosion in the industry8217;s confidence in last few months. quot;While the economic fundamentals may have remained strong during the period8230; the psychological fundamentals have not,quot; Tata said.

He saidthat the economy can be revived not by giving sops to a particular sector. The government withdrew from infrastructure development too soon which left a huge gap, he added.

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Mukesh Ambani called for a new green revolution as only agricultural growth could solve the problem of employment and quality of living. He too called for bringing back the small investor by offering PSU shares at a sensible price. This is the only way Rs 250,000 crore worth of domestic savings can be channelised into the markets.

State Bank of India chairman M S Verma said banks should be allowed to pick up an equity stake in large projects. quot;Along with loan exposures, commercial banks should be allowed to pick up equities in big projects8230; The quantum of stakes to be picked up should be left to banks,quot; Verma said.

The parliamentary committee will also attend a series of meetings with the Reserve Bank of India, the Securities and Exchange Board of India SEBI, industrialists, exporters and other officials. The committee membersinclude former finance minister Manmohan Singh, CPI leader Gurudas Gupta and JD leader Jaipal Reddy.