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The Bombay High Court today fixed for hearing on January 8 a petition filed by Financial Technologies India (FTIL) and its Chief Jignesh Shah challenging an order of Forward Market Commission (FMC) that held that both were not "fit and proper" to run any exchange.
The petition was mentioned by FTIL Counsel Janak Dwarkadas before a bench headed by Chief Justice Mohit Shah which asked the market regulator to file reply by January 6.
The petition has requested for quashing the FMC order that held FTIL is not 'fit and proper' to hold anything more than 2% shareholding in Multi-Commodity Exchange (MCX). FTIL has 26% shareholding in MCX.
The petition has also asked for interim relief to the extent of granting a stay on the FMC order until the matter is finally decided by the HC.
In its 80-page order, the Forward Markets Commission (FMC), which went into the running of NSEL following payment defaults of Rs 5,500 crore to investors, said that Shah was "practically the highest beneficiary of the fraud perpetrated at the NSEL Exchange".
FMC said, "Jignesh P Shah is not a 'fit and proper' person to hold any position in the management and the Board of any Exchange recognised or registered by the government of India/Forward Markets Commission under FCRA, 1952".
FMC had directed that neither Shah individually, nor though any company/entity controlled by him, either directly or indirectly, should hold any shares in any association/ exchange in excess of the threshold limit of the total paid-up equity capital as prescribed under FMC guidelines.
Other petitioners are Joseph Massey and Shreekant Javalgekar, former directors of MCX, against whom also FMC held that they were not fit to hold any position in the management and the Board of any Exchange.
Shah founded MCX in November 2003 and then went on to set up a stock exchange this year. He is the Chairman of FTIL, which owns and runs National Spot Exchange Ltd (NSEL), currently hit by a scam.
Shah, on October 9, quit as Vice-Chairman and Shareholder Director of MCX-SX, the third major stock exchange in the country. Few weeks later, he also resigned as Vice Chairman of MCX.
