BSE Director Vivek Kulkarni Quits; Raises Corporate Governance Concern
Vivek Kulkarni, a bureaucrat- turned-entrepreneur, has quit from the role of shareholder director at India's premier bourse, the Bombay Stock Exchange, citing corporate governance concerns and differences over the exchange’s proposal to acquire mutual funds registrar and transfer agent Computer Age Management Services for Rs 1,400 crore, the Economic Times reported today.
In his resignation letter, Kulkarni alleged that the board was given just two hours to discuss the proposal.
“The investment of more than Rs 1,400 crore, amounting to over 35% market capitalisation of the BSE, was discussed without advance information and the management wanted the board to take a decision in two hours. The only remaining competitive advantage of the BSE is the reserves it has earned over the past 100 years,” ET wrote quoting Kulkarni’s resignation letter.
His contention is the business of mutual funds registrar is dying and it will be taken over by the depositories, where the BSE already has a presence through Central Depository Services.
He further criticises BSE, in his resignation letter, wondering whether the 10 people in the top management of BSE has made any difference to the functioning of the firm and expreses concern over higher HR expenses, which have grown from Rs 25 crore a year to Rs 55 crore.
Non-executive chairman S Ramadorai, who is also the vice-chairman of software firm TCS, heads the BSE board. Keki Mistry, VC and CEO of HDFC , Andreas Preuss , deputy CEO of Deutsche Borse, and Kolkata High Court lawyer Sudipto Sarkar are shareholder directors on the board. Retired IAS officials SN Menon and Sanjiv Misra are the public interest directors, while Deena Mehta is one among the three trading member-directors on the board.
A mail and phone calls made to Kulkarni by VCCircle to get his comment went unanswered till the time of posting of this story. A BSE spokesperson couldn’t be contacted over phone despite several attempts.
During Kulkarni's tenure as IT secretary of Karnataka, Bangalore took phenomenal strides in IT and came to be acknowledged as the the Silicon Valley of India. Kulkarni has over 25 years of experience in managing different verticals of Business and Government departments. He was the IT & BT Secretary, Bangalore. He has done extensive work in marketing Bangalore at the International level. During his tenure as IT secretary, every week Bangalore saw one new foreign firm setting up shop in the city. Prior to this, he was the Finance Secretary (Resources) of Karnataka. He was Division Chief SEBI and Head of Advisory Services in CRISIL, where he developed the first risk assessment model for Indian mutual funds.
In his second career innings, he took to entrepreneurship and founded B2K Corp, a technical support center formed out of acquisition of a division of Talisma a large CRM company funded by Oak Ventures. Under his stewardship the company added 400 people in two years. B2K’s customers included Microsoft, Yahoo, Real Networks, and other prestigious firms. Brickwork was a division of B2K and is now a separate company with worldwide operations. The company has hundreds of clients both small and large companies from all over the world. In early 2008, Brickwork got a license from SEBI (Stock Exchange Board of India) as a credit rating agency under a new company, Brickwork Ratings. It was the 5th credit rating company in India that is licensed by SEBI. Kulkarni is a gold medalist in Bachelor of Engineering from Karnataka University and also an MBA in Finance & Information Systems from the Wharton School, University of Pennsylvania.