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Former home secretary Gopal Krishna Pillai has resigned as chairman of MCX Stock Exchange (MCX-SX), less than five months after being appointed to the post, handing over the baton to Thomas Mathew, the vice-chairman.
While MCX-SX, in a release, said Pillai had stepped down due to personal reasons, sources close to the ex-bureaucrat said he was “disturbed” by the announcement of a probe by the Central Bureau of Investigation (CBI) into alleged irregularities in the grant of sanction to MCX-SX in 2008 and its recognition being renewed in 2009 and 2010.
Pillai resigned from MCX-SX after a board meeting on Friday. On Thursday, reports had indicated that the entire board of the exchange might look to step down after news about the CBI investigation broke out. However, the exchange issued an early morning press release refuting it. In a separate press statement released at noon, MCX-SX said Mathew, who previously headed Life Insurance Corporation, had now been appointed chairman. The board also appointed Ashima Goyal, professor at Indira Gandhi Institute of Development Research (IGIDR), as the exchange’s vice-chairperson.
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“It was a wonderful experience to work with the team and I am stepping down due to personal reasons,” said an exchange press release, quoting Pillai.
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The resignation did not send a positive signal, even if such a move might only have limited impact on the exchange’s day-to-day functioning, said Shriram Subramanian, founder & managing director of corporate governance research firm InGovern Research Services. “A chairman resigning shortly after joining won’t have an impact as such on MCX-SX from an operational perspective. However, it is not a good sign both for the company and the individual. Anybody joining a company as director should do thorough due diligence. Internationally, directors even hire consultants for this work before joining as there are a lot of liabilities. MCX-SX had a baggage. The chairman, when he took over, was well aware of it.”
Finance Minister P Chidambaram said he hoped the directors of MCX-SX would act in public interest and that there was an orderly resolution of the crisis.
Pillai, Mathew and Goyal had come on board as part of the changes following the Rs 5,600-crore payment crisis at the Jignesh Shah-promoted National Spot Exchange Limited. Shah was earlier the vice-chairman at MCX-SX.
Under Pillai, the exchange had sought to distance itself from the NSEL issue and those associated with it. It had renegotiated contracts, including with former promoter entity Financial Technologies, looked to introduce new products such as interest rate futures and sought to conduct an audit of MCX-SX operations since its inception.
“I took charge of the exchange at a time when it had several challenges,” said Pillai in the press statement. “However, in the last few months, we have managed to appoint a new board and MD & CEO to take charge of the exchange. The ongoing rights issue is on track and we have received confirmation from several shareholders of participation. We have also been successful in rationalising costs in a significant manner, which will improve our balance sheet in times to come.”
Saurabh Sarkar was appointed managing director and chief executive officer of MCX-SX in February.
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