a loss of Rs. 650 crores incurred by a brokerage house…and says they can pay up. I gulped. We used to run a brokerage business and I am so so happy we are not in Emkay’s shoes.
However let us get the facts right.
In our office we had 12 terminals. Each terminal had a quantity limit, value limit and client limits. And the limits were goddamn low. In 1993-5 these limits were value limits of Rs. 100,000 for active customers, Rs. 50,000 for inactive customers.
We had a quantity limit of 2500 shares if shares had a face value of Rs. 10 and a limit of 500 shares if it had a face value of Rs. 100.
If a client wanted to sell say 45,000 shares of a ‘B’ group share, HE HAD TO CALL at 9am and confirm the transaction. One terminal limit would be increased by the accounts or internal audit guy and the transaction entered. However if he wanted to do it during the day….the CHAIRMAN’S terminal (RM was his name, and not telling u the full name) and the transaction would be entered. I HAVE PERSONALLY TURNED AWAY CLIENTS where we were not sure of getting delivery the next day.
If somebody tells me that there was a company where an employee COULD commit such a mistake (or fraud) I think the BOARD deserves to be sacked. The auditor was saying ‘adequate controls…’ God in one swift move he has wiped out the company? I shudder to think.
We were such a small company, we would have required about 30 generations to recoup this loss….
Now let us come to NSE. Here is a small company which does transactions worth say Rs. 10 -12 crores of transaction. Suddenly if the transaction goes to Rs. 650 crores – that too in 59 different transactions, should it not have triggered off some alarm button?
I remember when the ‘zero’ key got stuck…and the client was trying to sell 10 ACC….however the machine saw it as 10000. Nse called and I still remember being asked “Harshad aya hai kya tumhare office mein”…Similarly some quantity checks, some price checking HAS TO HAPPEN, RIGHT?
I still cannot believe that Emkay is calling this a ‘fat finger’ mistake……what say?
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