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the relevant Act (FCRA).”
Legal experts also said there are cases pending even before the Supreme Court where the competence of the FMC to give directions of this sort is being questioned as it has limited powers, unlike capital market regulator Sebi.
Some others said it’s difficult to strip Jignesh Shah of the fit-and-proper status in the first place.
“Jignesh Shah will lose the tag only if the government shows that his cross-holding is against the regulations and it also produces evidence that he has done something wrong. The evidence should show that Jignesh Shah has used his influence to ensure that offences, including insider trading, were committed or to ensure that losses were caused to others. Otherwise, such a move can be challenged by Shah in court,” said Srinivas Kotni, managing partner of Lexport, a law firm.
The Forward Markets Commission (FMC) had last month told the board members of the commodity spot exchange that “non-settlement of outstanding trade on NSEL seriously reflects on your credibility and reputation, which is a key ingredient in meeting the criteria for ‘fit and proper’ person. In the eventuality of you losing your status as a ‘fit and proper’ person, you cannot continue to hold directorship or share holding in any of the recognized futures commodity exchange”. And the latest statement showed the government is actively considering stripping the promoter of the ‘fit and proper’ status even now.