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DSE union alleges foul play in funds transfer -- Seeks SEBI intervention

Ambarish Mukherjee

NEW DELHI, Sept. 2

THE Delhi Stock Exchange Karmachari Union (DSEKU) has alleged that the audit committee of the exchange has okayed illegal transfer of funds from the capital assets funds to the general reserves in this year's annual accounts. It has sought the interventi on of the Securities and Exchange Board of India (SEBI) to take necessary action.

The Board of Delhi Stock Exchange will meet on Monday to finalise the annual accounts approved by the audit committee.

The controversy pertains to the transfer of Rs 32.7 crore from the ``assets created out of capital asset fund'' to the general reserves fund.

THE union has pointed out that as per the rules governing the stock exchange, which enjoys income-tax exemption, such a transfer is ``grossly illegal''. It is also planning to take up this issue and various other illegalities of the broker directors duri ng the past few months with the Joint Parliamentary Committee (JPC) probing the stock scam.

In a faxed letter to the Chairman of the Securities and Exchange Board of India (SEBI), Mr D.R. Mehta, the General Secretary of DSEKU, Mr Satyawan Singh, has demanded that the exchanges audit committee, whose current composition is ``illegal'' with more than 70 per cent of the members being brokers, be reconstituted by SEBI. The audit committee has passed this years accounts.

According to DSEKU: ``The balance sheet of the exchange is not true and fair as required under the Companies Act and the Department of Company Affairs (DCA) shall prosecute the stock exchange as well as all the directors individually.''

The union has also alleged that the newly appointed auditors are in nexus with a section of the brokers as they are also the auditors for some of the DSE brokers and has demanded that SEBI intervene to help the exchange run properly.

``In case the above mentioned steps are not taken,'' the DSEKU letter to Mr Mehta states, ``it will undermine SEBI's own credibility and we will be constrained to take this whole affair before the JPC. We have held consultations with all-India unions and they have promised all help. Therefore, we appeal to you to listen to us and take corrective action in the interest of the stock exchange.''