)
‘Trade with trust’ was the tag line marked on a small board at the entrance to the 11th annual general meeting of the Multi Commodity Exchange (MCX) here on Monday.
Ironic, as MCX is yet another company promoted by Financial Technologies, in the news for weeks due to the hair-raising stories coming out regarding FT-promoted National Spot Exchange Ltd(NSEL).
“Trust is missing from the trade,” said one entrant, a shareholder of the exchange. “NSEL has made us poor.”
He was, no doubt, seeking some words of consolation from Jignesh Shah, the vice-chairman of MCX, on the a steep decline in the latter’s scrip. “Lured by the trust, I entered into MCX shares through the secondary market at Rs 1,600 apiece; the price fell to Rs 290 within a year. The decline has shaken investors’ confidence completely and I feel cheated. I bought MCX shares from the savings of my entire life,” he said.
At noon sharp, the AGM started, without any of the expected protests from NSEL investors. The hall, capable of seating 1,000 with ease, was hardly 15 per cent full, with around a third from the media or MCX offices. Perhaps more than the shareholders, the exchange’s officials were themselves interested in an update from their top management about the future of the exchange and their jobs.
Yet, Shah, whose presence was eagerly awaited by both shareholders and media, remained absent. “For the first time,” said one board member.
R M Premkumar, appointed interim chairman after several resignations from the exchange, said on the NSEL crisis impact: “MCX is isolated from NSEL. We have re-audited our underlying commodity stocks and found these okay. MCX has a robust risk management system, with a strong regulatory supervision. Hence, we have no problem in the exchange.”
Shareholders, worried at the losses due to an abrupt fall in share prices, questioned: “Do you have any risk cover system like share buyback in place, to protect the interest of small shareholders who lost money due to the fall in the share price of MCX?”
“We do not have any share buyback plan,” Kumar answered.
Intervened P K Singhal, deputy managing director: “We have fully complied with regulatory guidelines, with Rs 40 crore of deposits in the Investor Protection Fund and Rs 327 crore in the Settlement Guarantee Fund, to cover if a need arises.”
Kumar said MCX was working to increase foreign holding in the exchange to 49 per cent from the existing 23 per cent.
