Sep 18, 2013, 01.43 PM | Source:

MCX falls over 7%, FT's representation on board may reduce

CNBC-TV18 is learnt from FMC's sources that Financial Technologies' -- the promoter of MCX -- representation on the MCX board is set to reduce to one from four.

Moneycontrol Bureau

Investors continued their selling in Multi Commodity Exchange of India  (MCX) as the stock fell more than 7 percent in afternoon trade Wednesday.

CNBC-TV18 learnt from FMC's sources that Financial Technologies ' -- the promoter of MCX -- representation on the MCX board is set to reduce to one from four.

MCX may be run like a public institution where the board is controlled by the institutional shareholders and independent directors, sources add.

Forward Markets Commission (FMC) chairman Ramesh Abhishek told CNBC-TV18 that anchor investors' stake in all exchanges will be capped at 26 percent.

"Proportion of shareholders of board of directors of exchanges will be in proportion to their shareholding which is a maximum of 26 percent after five years of operations. So half of the board of directors are independent and out of the shareholder directors, the other half will be institutional investors and the anchor investor will not have more than 1/4th of the number of shareholder directors. We had asked for some show cause notices to MCX also and we had writing to NSEL board also. And now we are all working on to see whether these people are fit and proper," chairman said.

Meanwhile, FMC is likely to issue a showcause notice to Financial Technologies and three MCX directors - Jignesh Shah, Joseph Massey and Shreekant Javalgekar - in the case related to the National Spot Exchange Limited (NSEL) crisis, reports CNBC-TV18. Shah is the head of Financial Technologies.

The notice pertains to the ‘fit and proper’ status of the exchange and all the accused are likely to be given 1-2 weeks to respond.

Financial Technologies is the promoter of NSEL that finds itself in deep trouble after the trading on the exchange was stopped on July 31 following payment crisis. The exchange is facing a problem of settling Rs 5600 crore due to 148 members/brokers, representing 13,000 investor clients.

At 13:16 hours IST, Multi Commodity Exchange of India was down 7.57 percent to Rs 410.45. There were pending sell orders of 62,666 shares, with no buyers available.

(Posted by Sunil Shankar Matkar)

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