According to informed sources, Ashish Chauhan would join BSE only if the exchange buys Marketplace Technologies. However, Chauhan said this company does not belong to him. What is the mystery behind this for which nobody wants to speak openly?

Bombay Stock Exchange, India's oldest stock exchange, wants to hire Ashish Chauhan, one of the founders of National Stock Exchange (NSE) as deputy chief executive and may buy Marketplace Technologies Pvt Ltd (MT) for Rs480 million as a precondition.
 
According to sources, BSE wants to buy this company, which installs broker terminals, in lieu of the job offered to Chauhan, who is likely to receive about Rs480 million as compensation.
 
When contacted, Chauhan refused to comment on the job offer. He also said, the company does not belong to him. However, he could not answer, why BSE would discuss the issue to buy MT and his job offer in the same meeting.
 
Interestingly, MT's website, which does not provide any names, mentions that "MT is founded and managed by a team of professionals, instrumental in setting up and operating India's largest stock exchange". Is it in reference with Chauhan’s association in setting up NSE, the largest stock exchange in India?
 
BSE had called an emergency meeting Wednesday to discuss the issue of acquiring privately held MT, which claims to provide software solutions to brokers besides installing trading terminals.
 
Vivek Kulkarni, one of the board members of BSE, said, "Since it was an emergency meeting, he could not attend it". However, Kulkarni said he had already put his views on record about the valuation being offered to MT.
 
NSE and Financial Technologies Ltd, which operates commodity exchange MCX, also have almost the same product that MT provides, however MT's market share is negligible compared with NSE and FT products.
 
According to sources, many board members of BSE had reservation on the valuation or the price being offered to MT as they felt the company had installed very few, just about 8-10, broker terminals. Another board member of BSE, Deena Mehta, who represents the trader community, preferred not to make any comment on the issue.
 
Earlier, Chauhan was chief information officer of Reliance Industries Ltd and chief executive of Mumbai Indians, one of the teams in the domestic cricket tournament, Indian Premier League.
 
Chauhan was also in the race for the chief executive’s post at BSE, for which Madhu Kannan was selected. Kannan was trying to rope in several of those people who were in the race for the top job, to join in his senior management team.
 
BSE, one of the oldest stock exchange in the world, has been losing its market share to NSE. According to global consultancy Celent estimates, the market turnover of NSE for 2009 would be more than two times the turnover of BSE. On 7th August, NSE turnover in value terms was around Rs176.5 billion as against BSE's about Rs54.4 billion.
 
BSE has also bought about 15% stake in United Stock Exchange of India Ltd (USE), one of the upcoming exchanges in the country in financial derivatives. USE, in turn, would use BSE's platform for trading. But the important question is when BSE already have its own currency derivative exchange, why it needs to invest in other exchange which is into the same business? Interestingly, BSE's currency futures have come down to a big zero in July from Rs85.5 million in January this year.
 
Also, BSE is losing on the trader workstation (TWS) front and number of cities it covered as well. BSE's installed trader workstation increased by just one number to 15,410 from 15,409 while total cities it covered fell to 338 from 360 cities, during January to July.

BSE was not immediately available for comments on both the issues and our mail to its chief executive remain unanswered. [email protected]