New Delhi: The Supreme Court has issued notices to the Securities and Exchange Board of India (SEBI) and the Ministry of Finance on a petition filed by the erstwhile Saurashtra Kutch Stock Exchange (SKSE) seeking recognition.
A bench headed by Justice B N Agarwal issued notices to the market regulator and the Finance Ministry on a petition filed by the erstwhile stock exchange, challenging the sectoral tribunal’s decision which upheld SEBI’s order withdrawing the recognition.
The Securities Appellate Tribunal had dismissed the erstwhile exchange’s plea on the ground that the exchange was not been functioning for past several years and no trading had taken place on its platform.
The SEBI withdrew recognition to the stock exchange a day before the due date of renewal, that is 9 July 2007, on grounds of misappropriation of funds by the management.
According to the appellant, the single member of SEBI had no power to pass order of cancellation or withdrawal of recognition. Only the full SEBI board could do that, it said.
Stating that it was providing services to a large number of investors in Saurashtra and Kutch, the erstwhile stock exchange said that it was recognised under the provisions of the Securities Contracts (Regulation) Act, 1956 and has been dealing in securities since 1989.
Senior counsel Altaf Ahmed said about 80 of its 400 members were actively participating in market activities through its subsidiary company SKSE Securities Ltd.
He said the duly-approved and SEBI-notified SKSE was set up under the Saurashtra Kutch Stock Exchange Ltd (Corporation and Demutualisation) Scheme, 2005 to revive small stock exchanges in the country.
Almost 25,000 investors are trading through sub-brokers affiliated to the subsidiary company, Ahmed said.
While stating that there were about 30,000 beneficiary owner client accounts in the depository participant of CDSL, the appellant said the daily turnover of its subsidiary company on the National Stock Exchange and the Bombay Stock Exchange was Rs50 to 60 crore. It also claimed having demat shares worth Rs 450 crore in the trading accounts.