If Jignesh Shah-led Financial Technologies fails to cut its stake in MCX to 2% from 26% by 30th April, then FMC may restrain the commodity exchange from launching fresh contracts
Multi Commodity Exchange (MCX), the country's largest commodity exchange may be barred launching fresh contracts if it fails to bring down promoter’s stake to 2%. Jignesh Shah-led Financial Technologies India Ltd (FTIL), the chief promoter holds 26% stake in MCX.
Commodities market regulator Forward Markets Commission (FMC) might crack the whip on MCX in case the bourse fails to comply with its directive on reducing promoter shareholding which came in the wake of Rs5,600 crore payment crisis at National Spot Exchange Ltd (NSEL).
“FMC will take action against MCX if they do not comply with the shareholding order by 30th April. FMC is likely to stop MCX from floating new contracts,” an official said.
The commodity market regulator’s order has been challenged by the group in Bombay High Court.
In its order of 17 December 2013, FMC declared FTIL and its chief Jignesh Shah as 'unfit' to run any exchange following the turmoil at NSEL.
The regulator said FTIL was not ‘fit and proper’ to hold more than 2% stake in MCX.
Following this, the MCX board also asked its promoter FTIL to divest shares in excess of 2%.
The NSEL, which is promoted by FTIL, has been defaulting on payments to 13,000 investors. In July, FMC had halted trading at the exchange.
Multiple investigative agencies like Enforcement Directorate and the CBI are already probing the NSEL payment crisis, while Revenue department, Reserve Bank of India, SEBI, FMC and Ministry of Corporate Affairs are also looking into it.
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