JPC to study functioning of bourses

By Our Special Correspondent

NEW DELHI, JUNE 28. The Joint Parliamentary Committee (JPC) probing the recent stock market scam would tour Kolkata and Mumbai between July 10 to 12 to enable the members to acquaint themselves with the functioning of bourses and regulatory mechanisms.

The JPC members will be in Kolkata on July 10 and the next two days in Mumbai. The committee now plans to examine witnesses later during the month.

In order to speed up its work, the JPC decided to have at least two to three sittings each week during the monsoon session of Parliament scheduled to start on July 23 and expected to last till the end of August.

The JPC chairman, Mr. Shriprakash Mani Tripathi, had earlier mentioned that the committee, which had time till the end of monsoon session to submit its report, would make all efforts but at the same time not ignore any aspect in order to meet the deadline. If required, the committee could request for more time.

Meanwhile, the JPC today heard Mr. C.R.L. Narasimhan, Deputy Editor, The Hindu, that stock markets had been given a ``larger than life role'' in the economy and society without realising that the bourses were often manipulated.

Briefing presspersons on the day's deliberations, a JPC member, Ms. Margaret Alva, said that Mr. Narasimhan was among the few experts the committee heard. He told the JPC that the present scam should be understood in the overall context of an economic and financial system still in transition.

He said there was no level-playing field for public sector undertakings and banks in the sector were suddenly being asked to compete with private players without any strict parameters in place. Mr. Narasimhan also felt that the unrealistic nature of wealth created and lost in the stock markets was not fully understood by the common investor.

Among his observations was that technology stocks were ``overrated'' and the extent of linking Nasdaq to Indian bourses was ``too large'', wherein everything was attributed to the rise and fall in Nasdaq.

On whether the stopping of badla was a wise move, Mr. Narasimhan said stopping the system would be tough to achieve given the limitations of the system.

On individuals losing savings through investment in chit funds and teak plantations, he emphasised the need to educate and protect investors as was being done in Tamil Nadu. He also suggested a code of conduct for financial/stock market scribes.

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