BSE not so proud of this turnover spike

MUMBAI: Asia’s oldest bourse the Bombay Stock Exchange (BSE) has been witnessing a staff exodus over the past few months with several employees, including the top brass appointed to steer the exchange to new heights, parting ways with the organisation. Non-renewal or expiry of contracts, high top management expenses, improper human resource management, tension with the employees’ union and dwindling market share of the exchange have led to the exit of staff across various levels.

STAFF CHURNING

The BSE has recently asked some employees to leave due to underperformance, said officials from the exchange. Seniors, including James Shapiro, head-corporate strategy and Eric Czervionke, head–index and data, are in the process of quitting the organisation, sources said. Apart from this, Anjan Choudhury, chief technology officer is also in the process of leaving the organisation. While for some, the exchange did not renew contracts, others are leaving on natural expiry of their tenure, they said.

“A few expatriates who had joined two years ago would be leaving their positions to return to their respective home countries after successfully completing their assigned tasks in the first phase of the transformation of the BSE. Anjan Chaudhary will be leaving the BSE after completing his contract in March 2011. His replacement has already been hired,” said an official from the exchange.

The BSE had earlier hired experienced professionals like James Shapiro, Nehal Vora, Sayee Srinivasan, and Rahul Parulekar to strengthen its senior management. Shapiro joined the exchange along with other senior officials like Sayee Srinivasan, who came from Chicago Mercantile Exchange and is currently head of product strategy; former law and compliance director of DSP Merrill Lynch , Nehal Vora is head of planning and policy while Rahul Parulekar, who was managing director with Citigroup Global Markets is currently designated as chief business officer and head of markets at the BSE.

Other senior officials across various departments who have quit the organisation over the past one year include CFO LP Aggarwal, HR head Prasanna Rao, legal head Sunil Kapadia, company secretary Vishvesh Bhagat, chief general managers AA Tirodkar, Kevin D’Souza, and senior or additional general managers Sanjay Saksena, Vinay Pai, Kalyan Bose, Mayank Mehta, Rekha Karnik and Saji Cherian. In the past couple of years, the BSE has seen exit of some highprofile top executives. Prominent among them were chief executive officer Rajnikant Patel and chairman Shekhar Datta, chief operating officer Mahesh Soneji, and non-executive chairman Jagdish Capoor.

COST RATIONALISATION

Over two dozen employees from middle and junior levels have also quit due to mounting resentment, after the exchange embarked upon cost-cutting, including freezing dearness allowance despite surging inflation. However, when contacted the exchange declined to comment on any freeze in dearness allowance.

The exchange is carrying out cost-cutting measures at the middle and junior levels to rationalise the overall staff expense after they hired senior staff for exorbitant salaries. BSE’s shareholder director Vivek Kulkarni, who resigned a few months ago, in his letter to the capital market regulator Sebi wrote about the alleged high HR cost.

“The BSE now has around 10 people in its top management, whereas earlier there was just the CEO. I am not sure if the top heavy management has made any difference. Very high unjustified human resource expenses without any corresponding benefits are a cause for concern,” he wrote in his letter. The BSE’s employee costs rose to around Rs 56 crore for the financial year ending March 2010 compared with Rs 29 crore at the end of March 2009.