Proceedings of the meeting of the Empowered Committee with the shareholders of the Exchange held on Wednesday, 28th March 2007 at 4.30 P.M. in the Trading Hall of the Exchange at 7, Lyons Range, Kolkata – 700 001 



1) Shri N.P. Bagchee, IAS (Retd.)             : Chairman

2) Shri Sunil Mitra, IAS                             : Member

3) Shri Dipankar ChatterjI, FCA                : Member

3) Shri P.K.Ray                                              : O.S.D, CSE - Member

4) Shri Kalyan Mukhopadhyay                 : Joint Secretary & DGM, CSE - Member

5) Shri M.A.V.Raju                                       : DGM, CSE – Member Secretary



1) Shri Arindam Guha                                     : Executive Director, PWC

2) Shri Anindya Mullick                                   : Project Manager, PWC

3) Shri Aloke Agarwal                               : Consultant PWC


Leave of Absence:

Leave of absence was granted to Shri Talleen Kumar, IAS who could not attend the meeting due to his preoccupation. 



Sixty nine shareholders of the Exchange attended the meeting.


At the outset the Chairman drew attention to the last para of Administrator’s Order of March 1, 2007 and stated that in the present meeting the Empowered Committee would restrict discussions accordingly.


Shri P.K.Ray, OSD, CSE with the permission of the Chairman introduced the members of the Empowered Committee to the shareholders of the Exchange.  Thereafter he invited the Chairman to address the shareholders.

The Chairman asked Shri Arindam Guha, Executive Director, PWC, Consultants to the demutualization programme to brief the shareholders about the progress of the divestment process made till date.  Shri Guha explained the steps taken such as preparation of Business Plan, Invitation for Expression of Interest and Information Memorandum, interacting with potential Investors like Financial Institutions, Banks, Commodity Exchanges, Private Equity Funds and some Corporate Houses for investing in the Exchange.  Shri Guha further informed the shareholders that the SEBI’s stipulation of maximum 5% holding by an investor is acting as a damper to the prospective investors who would like to have management control.  Moreover, ongoing litigation relating to the Land at EM By-pass, identification of the authority who would control the management of the Exchange post demutualization etc., have posed further hurdles for the financial investors to come forward to respond to the invitation for Expression of  their Interest for investment.   The aforesaid constraints have made the task of identifying potential investors more difficult.


Thereafter, the Chairman invited views and suggestions of the shareholders in this regard. 


In response to Shri S.K. Kaushik’s request, the Chairman advised OSD to inform shareholders of the proposal received from the Government of West Bengal regarding land at EM By-pass.  Accordingly, OSD briefed the shareholders in general terms, in respect of two alternative offers that were understood to have been proposed by State Government in discussions with the Administrator.  The shareholders were generally aware of the proposal as was communicated by the Administrator in an informal meeting taken by him on November 10, 2006 with some shareholders.  In that meeting the shareholders present were requested to discuss the proposal amongst themselves and revert with their considered view.  The Empowered Committee noted that CSE had not received their views as on date.  During the discussion that followed, Shri Kaushik observed that one of the reasons for investors not coming forth is the absence of a professional Board of Directors in the Exchange.  An appropriate Board may be constituted to project a better match to potential strategic investors.  Shri Kaushik suggested that State Government be requested to give its proposal regarding the land in writing to enable shareholders to examine the matter.


Thereafter Shri Sunil Mitra explained that the demutualization scheme envisaged by SEBI ordains a minimum divestment of 51% shares to persons other than shareholders of the Exchange.  SEBI has further directed that not more than 5% of shares could be given to any single entity.  The scheme is not an exceptional formulation for the Calcutta Stock Exchange alone.  Rather it is applicable to all Regional Exchanges.  Based on the aforesaid directions the Exchange’s consultants prepared the EOI which was duly advertised in national dailies and the Exchange constituted an Empowered Committee.  As per the terms of reference of the said Committee, the Chairman desired to interact with the shareholders of the Exchange for obtaining their views and suggestions and also to bring in transparency in the divestment process.  He also emphasized the fact that only shareholders of the Exchange will be benefited by successful completion of the demutualization including divestment and for this shareholders’ cooperation is of prime importance.  Shri Mitra further elaborated that to catch the attention of potential investors, who would be interested in taking up 5% stake, the Exchange has to project a value proposition.  The century old heritage of the Exchange combined with the availability of the state-of-the-art trading system, which could be utilized for trades other than equity, and the property at EM By-pass were the main areas which could be focussed for value addition.


Taking part in the discussion Shri Dipankar Chatterji, FCA observed that if shareholders agree in principle with the proposals put forward by the State Government regarding the Land, the Empowered Committee would request the Administrator to initiate a dialogue with the State Government.  He further assured the shareholders present in the meeting that any proposal regarding the By-pass property would be placed before the shareholders for their acceptance before it is acted upon.  


Thereafter Shri Binay Agarwal expressed his views in the sequence of events leading to the formation of the present Empowered Committee.  He pointed out that the Empowered Committee should have participation of shareholders as only they have stake in the Exchange.  Shri Agarwal was of the view that active participation of the State Government shall be of immense help for the identification of strategic investors.  The State Government may render support in the demutualization process of the Exchange by directing a government institution like WBIDC to act as a nodal agency, to subscribe 5% of the shares and arrange other concerns like WBFC and banks having headquarters in Kolkata to take up similar stake.  This initiative would encourage other investors to subscribe as financial investors. 


The shareholders also wished that the State Government may take a more proactive role in taking up the matter with Government of India.  The Chairman informed the shareholders that their suggestions would be considered.


During the course of interaction some other shareholders namely, Shri S.L. Agarwala, Shri Ashok Kumar Kayan, Shri Shree Nath Kapoor, Shri Rajendra Bhaiya, Shri Anil Agarwal, Shri Mahavir Soni also expressed their views relating to the present functioning of the Exchange.


            The shareholders in general appreciated the gesture of the Empowered Committee for giving an opportunity to them for presenting their views and comments.  They requested the Empowered Committee to consider the submissions made by the shareholders in the best interest of the Exchange.


            There being no other business, the meeting ended with a vote of thanks to the Chair.