In yet another such case of the fit-and proper status of the promoter of a commodity exchange being under threat, promoters of 16-month-old United Commodity Exchange (UCX) are alleged to have siphoned funds.
UCX is promoted by Commex Technologies chief Ketan Sheth, who owns 40 per cent stake in the exchange.
On July 19, the exchange said it wouldn't issue any new contracts. While the exchange's business has come to a halt, its employees are said to be quitting.
The Forward Markets Commission (FMC) has asked the exchange's board to suggest names of auditors, after which the regulator will approve one. FMC Chairman Ramesh Abhishek said, "Based on the forensic report, we will take further action."
As on March 31, UCX's total settlement guarantee fund stood at Rs 16 crore.
A few months ago, Kailash Gupta, promoter of Ahmedabad-based National Multi Commodity Exchange, was declared unfit to run a commodity exchange. Subsequently, Financial Technologies India and its chief, Jignesh Shah, were declared not 'fit and proper' to run an exchange. Last month, FMC had found an unusual increase in trading at UCX. At that time, it was feared the increased volume was either fictitious or aimed at adjusting profit-and-loss transactions. In April, a notice was sent to the exchange, inquiring about the action taken regarding trading. After an audit, FMC "found many other irregularities in the exchange and, therefore, have ordered a forensic audit", said an FMC official.
National Bank for Agriculture and Rural Development holds 16 per cent in UCX, IFFCO 15 per cent, IDBI Bank 10 per cent and Rural Electrification Corporation 16 per cent.
