MCX-SX says preempting resignations of board members speculative

Written by fe Bureau | Mumbai | Updated: Mar 14 2014, 18:44pm hrs
MCX-SX, the troubled sister concern of Rs 5600 crore scam ridden National Spot exchange (NSEL) on Friday said that media reports of likely resignations of its board members( Public Interest Directors) are 'speculative'.

In a early morning press release, MCX-SX, a Financial Technologies group company said that the board meeting scheduled later in the day was planned a month a back and is not an emergency meeting as portrayed by some media reports.

It would be speculative to pre-empt resignation of all PIDs and we would request to refrain from rumors and await the announcement post the board meeting. As in the case of other companies, new members would be nominated by shareholders or independent directors would be appointed by the regulator if the need arises, said the release.

The board meeting is likely to commence sometime around 1400 hrs in the afternoon.

On Thursday evening several media reports suggested that MCX-SX was likely to see resignations of its newly-appointed chairman GK Pillai, along with other public interest directors, following a probe launched by Central Bureau of Investigation (CBI) into the grant of license to the exchange five years ago.

Earlier in the day, CBI filed a preliminary inquiry against FTIL, another group company Multi Commodity Exchange (MCX) and two former officials of Securities and exchange Board of India (SEBI) over the equity trading licence approved to MCX-SX.

The move came as a surprise given that both the officials named in the enquiry, ex-SEBI chief C B Bhave, and former whole-time member KM Abraham, contended granting an approval to MCX-SX until the exchange complied with certain shareholding norms.

The CBI also filed a case against NSEL and its promoters under the Prevention of Corruption Act, alleging criminal conspiracy by it to cheat a public sector company, PEC Ltd.

On Friday, MCX-SX further claimed that its rights issue was on track and it has received a confirmation from several shareholders for participation.

The outcome of the rights issue will be made public upon its completion by end of this month, said the release. In the rights issue, the existing shareholders are being issued fresh shares to raise funds.

Meanwhile, shares of financial technologies which opened at lower circuit, recovered marginally and were trading at Rs 363.4, down 3.9% at about 1300 hrs.

The counter has turned volatile in last three days witnessing wide swings. On Thursday, it plunged to a lower circuit after news of CBI inquiries emerged and closed at Rs 378, down 4.3%. On Wednesday shares had jumped to an upper circuit on reports that several leading technology providers including Infosys, Cognizant Technology Solutions and L&T Infotech had approached the company for a strategic partnership.

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