FTIL, MCX fall up to 3.5 pc on FMC ruling
Dec 19 2013 , Mumbai
FTIL shares ended 3.45 per cent lower at Rs 161.05 on the BSE stock exchange.
Similarly, MCX was down 1.48 per cent to Rs 415.10.
Shah founded Multi-Commodity Exchange (MCX) in November 2003 and then went on to set up a stock exchange this year. He is currently the Chairman of Financial Technologies India Ltd (FTIL) which owns and runs National Spot Exchange Ltd (NSEL) where a Rs 5,500 crore payment crisis is being probed by multiple agencies.
In an 80-page order, the Forward Markets Commission (FMC), which went into the running of NSEL following payment defaults, held that FTIL is not a 'fit and proper person' to hold anything more than 2 per cent shareholding in the MCX.
FTIL currently has 26 per cent stake in MCX, the country's largest commodity exchange and will need to cut its stake following the FMC order.
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.
Noting that Shah was "practically the highest beneficiary of the fraud perpetrated at the NSEL Exchange", the FMC ordered that "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".