The board of directors of the Vadodara Stock Exchange (VSE) has for the third time deferred the 23rd annual general meeting (AGM), this time to November 25, after the board of the regional stock exchange failed to rectify a factual error in financial accounts for 2012-13, which has to be presented at the meeting, leading to opposition by the trading members of the regional stock exchange.
The brokers associated with the VSE insist that the board meet up and rectify the mistake before presenting the report to the AGM. The error can only be rectified by a board with an equal number of public interest directors and share holder directors, as per the guidelines of the Securities and Exchange Board of India (SEBI).
However, at VSE the number of public interest directors at 2 is half the shareholder directors, after two public interest directors, including the former chairman Samir Joshi, resigned following controversy over the appointment of the new managing director of the VSE. This means that either two more public interest directors get appointed by the SEBI or two shareholder directors resign.
While the possibility of the latter remains dim because of the reluctance of the shareholder directors to resign, sources in the management of the VSE said that the SEBI might again intervene and recruit two new PI directors, a development that has not gone down well with the broker members of the VSE.
“The board of directors of the VSE has clearly been unwilling to hold an AGM which is why the meeting is being cancelled thrice, one on September 28, then again on October 28, and now on November 18. To facilitate rectification of the financial account, the two extra shareholder directors should resign which they will not because they are getting salary for doing nothing and they do not want to let that go,” an aggrieved broker said.
Brokers alleged that the directors of the VSE kept their personal interest above the interest of the institution that was already on the verge of being derecognised by the SEBI in the event it fails to raise Rs 100-crore networth by May 31, 2014. The first AGM was cancelled on September 28 after the trading members raised objection to the clearing of the financial account due to imbalance in the number of public interest and shareholder directors of the board.