MUMBAI, MARCH 25: The sacked president of the Bombay Stock Exchange (BSE) and its executive director have passed the blame on each other for the price rigging and the resultant payment crisis on the exchange last year. While executive director R C Mathur - who himself is facing action from the Securities and Exchange Board of India (SEBI) for his role in the episode - has laid the blame at the doorsteps of outgoing president J C Parekh, the latter has shifted the onus on Mathur for all the wrong-doings in the exchange and insisted that the SEBI was kept informed of the developments.``I am totally innocent. The day-to-day affairs of the exchange were handled by Mathur and he is responsible for everything. I was just an advisor,'' Parekh told The Indian Express. Calling the SEBI order ``unfair'', Parekh said ``I can only suggest measures but all the final decisions were only taken by Mathur.''On the other hand, Mathur, in his reply to the SEBI show-cause, had categorically blamed Parekh and thethen vice-president Rajendra Banthia for forcing him to accept ad-hoc margins in the form of shares. Mathur said Parekh and Banthia had vehemently protested the levying of enhanced margins and they suggested that as a one time measure, margins could be collected in the form of shares.Mathur would be heard personally by the SEBI chairman on March 30 and action would be taken after that. In his reply, Mathur said he was not comfortable with the move and had suggested that if shares were to be accepted, the same should be from the A group shares, belonging to companies other than those involved in the hyper volatile situation of that day. The BSE ED said his suggestion was not accepted by Parekh and Banthia.Mathur also told the SEBI that the BOLT trading system was kept opened beyond trading hours on the direction of the President. Accepting this charge, Parekh claimed that as the president of the BSE, he was accorded powers by the governing board to report trading even after office hours. "I've done thisto protect the market as over Rs 1,000 crore of securities was under cloud. If I would not have done this, the market would have crashed and over 20 brokers would have been declared defaulters," Parekh said.Mathur had kept the SEBI executive director and the SEBI's representative on the BSE governing board, L K Singhvi, informed about the opening of Bolt after trading hours. ``Therefore, I do not think I have done anything wrong," Parekh said. Parekh insisted that the tampering of the BOLT system was not illegal and was done in the larger interest of the stock market.This has given rise to a serious question why the SEBI did not prevent the BSE from tampering with the computer system. ``The SEBI representative could have asked the BSE not to fiddle with the system. This doesn't seem to have happened. It is also a mystery why the executive director's reply to the show-cause is being taken up after sacking the president. Besides, the SEBI is yet to bring out the role of promoters of three rigged companies(BPL, Videocon and Sterlite) in the whole exercise,'' said a market source.What has surprised marketmen is that the SEBI kept quiet while the margins were reduced. Parekh claimed that even SEBI has BOLT terminals in its offices but did not notice any wrong-doings. The speculative build-up in three scrips was going on for more than three months, but the market watchdog did not act at all until the market crashed after the budget. "SEBI's investigation should be more pro-active instead of reacting to market crashes," market sources said.In its order to sack Parekh, the SEBI said that the midnight deals were entered as bulk deals or all or none deals at predetermined rates and quantities by synchronising the timing of logging in of the trades by the buyers and the sellers. "This was abuse of the trading system as all or none deals can be entered only when the trading system is open and counter parties deal through impersonal trading screen. All such deals entered into the trading system beyond the tradinghours were not negotiated deals as claimed," the SEBI said.Parekh will move the appellate authority of the finance ministry on Friday morning challenging the SEBI order.
