Reliance Cap raises corporate governance issues

Reliance Capital, a Reliance Group financial services company, has written to the Forward Markets Commission, raising doubts about corporate governance practices at Multi-Commodity Exchange (MCX).

It suggested the regulator use its regulatory powers and pass an order annulling all agreements MCX and its promoter Financial Technologies India Ltd (FTIL) had entered into. This, the company said, should be done after ensuring MCX's business continuity and without penalties.

The company has emerged as the highest bidder for FTIL's stake in the exchange (Rs 750 a share). It has written to the regulator, asking it to ensure the full report was made available in the public domain.

In its letter, the company said from the extracts of the report, it was apparent the exchange would have to face tax and governance issues, which exposed MCX to significant uncapped and un-quantified financial risks. Seeking the technology contract between MCX and FTIL be annulled, Reliance Capital said an independent global third-part consultant should be appointed to advise on the termination of the contract and invite new technology and support partners. For these steps, FMC should assume full control of the divestment and change of technology process, as well as take immediate steps to appoint a new chief executive at the exchange, the company said.