MCX Clearing Corp’s top boss appointment hits legal hurdle over technicality

The appointment of Multi Commodity Exchange Clearing Corporation’s Managing Director and CEO Narendra Alhawat has run into a legal hurdle as the company is yet to comply with a technicality under the Companies Act and Securities Contract Regulations Act.

MCXCC, the wholly-owned clearing arm of the Multi Commodity Exchange (MCX), had appointed Ahlwawat MD and CEO in April last year for three years. After the company’s board and the Securities and Exchange Board of India (SEBI) had approved the appointment, the same had to be approved by shareholders in the immediate extra-ordinary general meeting that followed.

MCXCC had held an EGM in on May 9, 2018, but the appointment of Ahlawat was not ratified.

“The extra ordinary general meeting on May 9, 2018 was held at a short notice and was for a specific purpose due to exigency of matter and hence the approval of shareholders for appointment (of Allhawat) as managing director could not be taken up, and was taken up at the AGM held on August 16, 2018,” MCXCC said in a clarification note to shareholders.

MCXCC later got shareholder approval for Ahlawat’s appointment at its annual general body meeting in August 2018.

After SEBI raised the issue about the delay in getting shareholders’ approval, MCXCC again called an extra ordinary general meeting on December 24, 2019 and one of the items on the agenda was to ratify the delay in getting shareholders’ nod. However, the exchange in an announcement after the meeting said it had withdrawn the resolution without giving any reasons.

This has landed MCXCC in the crosshair of SEBI. Ahlawat’s continuance as the MD and CEO of the company hinges on the matter being resolved amicably with the regulator.