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A government statement said FIPB, which met on June 14, rejected the proposal of the commodity exchange. MCX was seeking post facto approval for FDI (foreign direct investment) received before the issuance of the guidelines for overseas investment in commodity exchanges.
AML, a Mauritius-based trust, had bought 781,508 equity shares (around two per cent) at a face value of Rs 5 each from Financial Technologies, the promoter of MCX, in 2008. Since, the deal was executed before the mandatory approval of FIPB on all overseas transactions, MCX was required to obtain post facto approval later.
MCX in its draft red herring prospectus (DRHP) filed on March 31, 2011 lists out Passport Capital LLC, Euronext NV, Aginyx Enterprises Ltd, Merrill Lynch Holdings (Mauritius), GLG Financial Fund, Intel Capital (Mauritius) Ltd, New Vernon Private Equity Ltd, Alexandra Mauritius Ltd, IGSB-STAD I, LLC as foreign bodies holding stake in MCX.
As of today, foreign bodies together hold a 20.21 per cent stake in the exchange. AML intended to sell its 488,442 equity shares (0.96 per cent) through the IPO, which, according to sources, required a post facto approval from the FIPB. The DRHP had listed out AML as one of the sellers of a part of its stake through IPO.
While the Securities and Exchange Board of India (Sebi) granted post facto approval to MCX’s IPO with a condition that MCX would obtain FIPB approval for the stake sale of Alexandra Mauritius Ltd through IPO. Now, with the FIPB rejecting the approval, Sebi would have to decide on the stake sale through IPO.
An MCX spokesperson said, “This pertains to a foreign shareholder in MCX, who has to furnish certain information, for a post facto approval, MCX is merely a facilitator for this post facto approval.”
