Vadodara Stock Exchange still vulnerable to Y2K bug

A Stand-off between the Vadodara Stock Exchange (VSE) and the public sector undertaking Computer Maintenance Corporation (CMC), for well over a month, has placed the financially-starved Exchange vulnerable to the Y2K threat.

Though the VSE claims that it is Y2K compliant since the mock trading they carried out was successful, officials say that it is yet to receive the Y2K compliant certificate from the CMC. "I cannot inform the Securities Exchange Board of India (SEBI) about it as we are yet to get the certificate from the CMC which carried out the check," President of the VSE, Pankaj Bhargava said. But he hoped that they would receive the certificate before the SEBI’s December15 deadline.

But the inordinate delays inY2K compliance is believed to have been the result of a fallout over payment wrangles. While Bhargava blamed the CMC for ignoring the Exchange’s demand for discount and causing the delay, the latter said that the Exchange’s outstanding dues were the bone of contention.

"I had written to the CMC during the first week of November but nothing was done till recently. We cannot be blamed for delaying on the compliance," defended Bhargava, "They were asking us to pay Rs 8 lakhs for the work and we wanted a discount on it. It was only recently that they agreed to a discount of Rs 3 lakhs adjustable with the Annual Maintenance Cost," Bhargava added.

Prakash Chaturvedi, Mumbai-based Senior Manager (Business development) of the CMC, however denies these claims. "We have not given them any discount. Our main objection was the outstanding dues. We had told them in clear terms that unless our outstanding dues are cleared, we will not carry out the upgradation," Chaturvedi said. He said that since the outstanding dues were cleared recently, the CMC engineers carried out the checks.

On the issuing of the certificate, Chaturvedi said that it will be done only when the reports from the engineers are assessed. "We haven’t received our engineers’ reports. Once we get them and are assured about the compliance we will issue the certificate, he said. When asked if that would happen before the December 15 deadline, he said "Hopefully, it will be issued by that time."

Ironically though, despite warnings given by the Bombay Stock Exchange (BSE) brokers to the investors about dealing carefully with the non-compliant VSE, city-based share brokers hardly seemed concerned. "The business over the last couple of years has drastically come down. In fact in the last two months there has been almost no business. So it does not make any difference to the brokers as most of them have shifted either to the BSE or NSE," said a city-based broker, Ajay Shroff. He added that a Y2K crash would then mean the elimination of the exchange completely.

Even Bhargava admits that as against a trading volume of about 100 crore about four years back, today the volume is less than a crore. Even the number of share brokers trading with the exchange have gone down from about 150 to less than 100, most of whom are trading with the BSE and NSE.

Compiled from local news media