Promote INDONEX to protect investors
WHETHER THE capital market crisis was a natural consequence of the recent statements of the Union Finance Minister or was a result of well-planned conspiracy of big brokers of the NSE and the BSE, the fact is that this has caused heavy losses to common investors.india Updated: May 25, 2006 00:21 IST
WHETHER THE capital market crisis was a natural consequence of the recent statements of the Union Finance Minister or was a result of well-planned conspiracy of big brokers of the NSE and the BSE, the fact is that this has caused heavy losses to common investors.
While many brokers felt that the doom in the capital market was the result of wrong policies of the Security and Exchange Board of India (SEBI) and the government, president of UPSE Brokers Association Sushil Kumar Kanodia felt that the crisis was a conspiracy hatched by some big brokers in collusion with senior officials of SEBI. Had the government not taken timely actions by forcing the banks and the LIC to buy shares, the situation would have been altogether different, he said.However, Kanodia said that the government should take stable measures to check the recurrence of such situation. He told the Hindustan Times that there was an immediate need of creating a third platform for trading.
The third platform was the creation of INDONEX. But the government could not ‘OK’ the constitution of the new platform following pressures from big brokers. If the government was serious about the security of the small investors, it should immediately promote INDONEX, he added.
He said at present big brokers gave permission to those who deposited 25 percent margin money and in case of fall in the margin money at any time they exercised their rights to sell their shares. This often created trouble for the capital market, he added.Besides the trading permission given to companies having investment capacity of Rs 20 crore would not yield any good results unless all the ‘A’ class companies were included in the trading net.
He said it was surprising that despite several programmes to educate the small investors, the interests of these investors could not be protected and they fell victim to the whims of big brokers. Kanodia said big brokers’ proprietary accounts should be stopped to protect the common investors.