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Sep 18, 2013, 01.35 PM IST | Source: CNBC-TV18

FT group to lose control over MCX board as FMC acts tough

The change in board constitution will result in the MCX being run like a public institution, with the board being controlled by institutional shareholders and independent directors.

Varinder Bansal

Head - Research, CNBC-TV18

The beleaguered Financial Technologies group is set to lose influence over the functioning of its listed group company Multi Commodities Exchange(MCX). The FT group’s representation on the MCX board will reduce to one member, from four members presently, reports CNBC-TV18's Varinder Bansal.

This is in line with the recent FMC norm restricting the number of board representatives of the anchor investor in proportion to their equity holding in the company.

The change in board constitution will result in the MCX being run like a public institution, with the board being controlled by institutional shareholders and independent directors.

Also Read: FMC showcause to FT, Jignesh Shah, 2 MCX directors likely

Currently there are 14 board seats in MCX, 50 percent of them (seven seats) being for independent directors.

“We are strengthening role of institutional investors to improve the corporate governance on commodity exchange,” an FMC official told CNBC-TV18.

The changes are significant, coming at a time as the FMC is evaluating whether the promoters of the FT group satisfy the ‘fit and proper’ criteria to run an exchange.

The market may already have priced in the expected improvement in corporate governance practices at MCX. After touching Rs 502 a few days back, the stock has fallen sharply to Rs 410 today

READ MORE ON  Financial Technologies, MCX, FMC
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