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Multi Commodity Exchange (MCX) is inching towards ensuring its erstwhile promoter and anchor investor, Financial Technologies, divests its 26 per cent stake.
It board of directors ratified on Thursday the postal ballot result giving it power to transfer the stake of FTIL into an escrow account, once notified by the government.
The board has also decided to appoint a new auditor, Shah Gupta & Co, replacing Deloitte Haskins and Sells after many years. Both moves are on the direction of the regulator, the Forward Markets Commission (FMC). It rapped FTIL as unfit to play an anchor investor role in the wake of the payments scam at National Spot Exchange, a subsidiary. And, a forensic audit it had directed, to be done by Price Waterhouse, had rapped Deloitte.
According to the company filing on the BSE, independent director Pravir Vohra has resigned. He was on several board committees. Bank of Baroda has divested its complete stake from the exchange and, hence, its nominee director, Rajiv Abhyankar, ceases to be one.
According to sources, the board also decided that in future whenever there are regulatory or statutory directions, than that should be made part of the Articles of Association, without having to seek shareholder approval, as such instructions have to be implemented in any case.
FMC has already approved the stake transfer and the Union government is to now notify the authority of MCX to do so. However, to use the power to transfer the shares of FTIL to escrow and sell in case it is required, the MCX board will have to meet again and decide.
This is a first of its kind case in corporate India, when a company will have to ensure its shareholder sells its stake and if it does not, the company board will have to do that job. The position of the board is tricky because they are trustees of the FTIL shares, once escrowed. If these have to be sold, a process has to be followed to ensure the original owner gets the highest price possible.
Till all this is done, FMC is not approving any new contracts of the exchange.
FTIL has also not got any binding offers for its stake in MCX so far. One issue in the way is the technology agreement between FTIL and MCX, which Price Waterhouse had termed one-sided, favouring FTIL. FMC had given a deadline of end-June to MCX for completing its renegotiation. While the deadline is unlikely to be met, sources said the negotiations had progressed well.
| Correction |
| The report wrongly mentioned that Pricewaterhouse carried out a forensic audit of the Multi Commodity Exchange and that the report had rapped Deloitte. Pricewaterhouse had actually carried out a special audit of MCX and the report did not pass any judgement on Deloitte. The errors are regretted. |
