MCX, MSEI ink pact to settle warrant dispute out of court

Ending a long-run dispute over its shareholding, leading commodity exchange MCX today said it has entered into an agreement with stock bourse MSEI to settle their dispute over warrant cancellation out of court.

After the settlement, MCX' stake in Metropolitan Stock Exchange of India (MSEI) will increase to 14.99 percent from the current about 3.9 percent.

As per the regulatory norms, a commodity exchange cannot hold more than 15 percent in any stock exchange.

MCX was holding 41.59 crore warrants of face value of Rs one each in Metropolitan Stock Exchange of India (MSEI). The case was before Bombay High Court.

In a BSE filing, the commodity exchange informed that "MCX and MSEI have, inter-alia, entered into consent terms to bring quietus to the ongoing litigation in respect of 41.59 crore warrants of MSEI held by MCX." As per the agreement, MSEI will allot 26.51 crore equity shares in lieu of same number of warrants.

MSEI will cancel the remaining 15.07 crore warrants held by MCX.

"On satisfaction of the consent terms, Rs 15.07 crore towards refund of cancellable warrants will be released in favour of MCX," the filing said.

The agreement would executed subject to necessary approvals including from Sebi.