G K Pillai quits Multi Commodity Exchange as CBI probes stock exchange licence

Written by Express news service | Mumbai/New Delhi | Updated: Mar 15 2014, 18:13pm hrs
GK PillaiFormer Home Secretary G K Pillai has resigned as Chairman of MCX Stock Exchange.
A day after the CBI registered a preliminary enquiry against former SEBI chairman C B Bhave and former member K M Abraham for alleged lapses in granting approval to the MCX Stock Exchange, former Union home secretary G K Pillai quit as the chairman of the exchange citing personal reasons.

Its not true that all the board members were planning to quit. There was no such plan. The CBI action took us by surprise and it came on the eve of a scheduled board meeting. Only Mr Pillai resigned. SEBI has been supporting the exchange. The regulator was instrumental in changing the entire board after the NSEL scam surfaced. And promoters have been removed, an MCX-SX director, who did not wish to be named, told The Indian Express.

In a statement here on Friday, the board of MCX-SX also dismissed speculative reports claiming that several board members are likely to put in their resignations.

The MCX-SX board met here and elected Thomas Mathew T, former LIC chairman, as the chairman of the exchange and Ashima Goyal, professor at Indira Gandhi Institute of Development Research (IGIDR), as vice-chairperson.

Much will depend on the success of the rights issue. The promoters have been asked to pare their holdings. It is going to happen soon, the MCX-SX director said.

Outgoing chairman Pillai said: I am happy to state that MCX-SX is run by a professional management team and

has an eminent board. I took charge of the exchange at a time when it had several challenges. However, in the last few months, we have managed to appoint a new board and MD and CEO to take charge of the exchange.

Sources said one reason for the resignation of Pillai could be that he did not want to get entangled in a CBI

investigation. Pillai, who came to the exchange board only recently, was in government service when the MCX-SX approval case was going on two-three years ago.

The MCX-SX board was surprised by the CBI action as Bhave and Abraham were opposed to the grant of licence until the exchange met strict guidelines set by the regulator.

Pillai said the ongoing rights issue is on track and the exchange has received confirmation from several shareholders for participation. We have also been successful in rationalising costs in a significant manner, which will improve our balance sheet in times to come. It was a wonderful experience to work with the team and I am stepping down due to personal reasons, Pillai said.

MCX-SX has decided to remove Jignesh Shahs FTIL and MCX as the promoter of the exchange. FTIL and MCX have been re-classified from the category of promoter shareholder to public shareholder, it said.

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