Bihar stock exchange could be a defaulter

The Magadh Stock Exchange is in a mess. It has become a defaulter under the provisions of the Companies Act, reports Anil Kumar.

The Magadh Stock Exchange is in a mess. It has become a defaulter under the provisions of the Companies Act.

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This has been revealed by a five-member committee that met recently under the chairmanship of the former president of the stock exchange, SK Rungta, to evaluate its present status and also to mull ways to return the security deposits of over 101 members lying locked with the non-functional bourse.

Originally, the Exchange was an association of 190 brokers that was limited by guarantee. Later, it transformed itself into a corporate entity, to become a company that was limited by shares with 101 shareholders.

“Under the situation arising out of its de-recognition, only the council of management is authorised to complete the formalities and compliances,” Rungta said.

The accounts for the financial years 2006-2007 and 2007-2008 have to be audited and approved at the annual general meting (AGM). More importantly, annual compliances before the Registrar of Companies have to be made.

“A process has to be followed for cleaning up the mess. We have recommended holding an AGM of shareholders for completing the formalities,” Rungta said.

Under these circumstances, an early return of the security deposits of the shareholders seems unlikely. On the flip side, however, the stalemate might provide the necessary time for salvaging it.