In its order dated 6th January, 2009 the Madras High Court directed SEBI to consider the application of Coimbatore Stock Exchange (CSX) under exit option scheme of SEBI and pass orders before 31st March, 2009.
Even before the announcement of Exit Option for Regional Stock Exchanges by SEBI, Coimbatore Stock Exchange was the first to find out an innovative way by surrendering the recognition granted to it by SEBI citing unviability.
This surrender was not accepted by SEBI and the matter went to Madras High Court. The matter was pending before Madras HC for the past two and half years. Eventhough SEBI fought the case vehemently it had come to realities at last and announced the Exit Option for Regional Stock Exchanges. This is what CSX did at their AGM on 15.2.2006.
CSX is the first to avail the Exit Option and it had applied to SEBI on 1.1.2009 even when the case was in progress and brought this to the notice of Madras HC. Based on this the Court had directed SEBI to consider this application and pass orders on or before 31st March, 2009. CSX will have to comply with conditions stipulated in the Exit Option Scheme.
As CSX is being managed by a Three Member Committee at present, it is to be seen how the Committee is going to fulfill the conditions before 31.3.2009 to comply with the Court order. According to sources close to CSX the duly elected directors have not been given access to any records, vouchers, account books etc for the past two and half years by the Three Member Committee and it is only proper if SEBI hands over the management to the elected directors immediately so that they can take steps to complete the formalities. When contacted, the elected directors are confident that SEBI encourages good corporate governance and soon they will recall Three Member Committee and put the democratically elected directors back on the saddle.
It is expected several other Regional Stock Exchanges may follow suit and approach SEBI for derecognition.
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