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Financial Technologies India Ltd (FTIL) on Friday deferred its decision on a 24 per cent stake sale in Multi-Commodity Exchange (MCX) to May 2, after prospective buyers sought more time for placing "binding bids".
The company board was scheduled to finalise the bidder for its stake sale in the commodity bourse on Friday. However, potential buyers requested FTIL to delay the decision till the MCX board decided on action related to a special audit report by PricewaterhouseCoopers (PWC).
"This (deferment) is in light of the bidders seeking an extension to put in their binding bids, subsequent to MCX board meeting on April 26 for deliberating and deciding the further course of action on the special audit report conducted by PwC," the company said in a release.
PWC is said to have raised corporate governance issues at MCX. It has also reported adverse findings related to technology contracts between MCX and FTIL. The MCX board will decide on a course of action on the audit report at its meeting on Saturday.
About 10 bidders have expressed interest in FTIL's stake in MCX. The binding bids are likely only after the MCX board meeting. FTIL has appointed JM Financial as the merchant banker to review the bids.
Meanwhile, a few bidders have written to the Forward Markets Commission (FMC), saying MCX isn't sharing information critical to placing binding bids. Reliance Capital, one of the bidders, has asked FMC to take full control of the divestment process.
In a press release, FTIL said, "The divestment of 24 per cent stake in MCX was without prejudice to FTIL's rights pending before the court." FTIL has challenged FMC's 'fit and proper' verdict in high court here. In the press release, it has also sought the draft audit report so that it can justify the allegations against it, but neither MCX nor PWC has shared the report with the exchange's anchor investor.
The release said, "We would like to point out all transactions between MCX and FTIL have been clearly disclosed in MCX's statutory audit conducted by leading auditors for the past 10 years. Also, all transactions between the two companies were clearly based on commercial agreements disclosed in detail in MCX's final red herring prospectus, filed in 2012, based on which the market regulator allowed MCX's initial public offering in March 2012."
FMC had, in December 2013, declared FTIL not 'fit and proper' to run an exchange, as it held 99.9 per cent stake in the crisis-hit National Spot Exchange Ltd.
