MCX AGM set to be stormy

Written by PTI | Mumbai | Updated: Sep 30 2013, 03:20am hrs
The annual general meeting of the Multi-Commodity Exchange of India (MCX), scheduled for tomorrow, could well be a stormy affair as some NSEL investors plan to protest outside the venue.

MCX, the only listed commodity exchange in the country, is promoted by troubled Financial Technologies (FTIL), whose group firm National Spot Exchange (NSEL) is at the centre of payment crisis and holds 26 percent in the exchange.

Last week, auditors of FTIL had withdrawn their audit report for FY 2013, saying the financial statements could no longer be "relied upon".

FTIL's statutory auditor Deloitte Haskins & Sells had withdrawn its audit report certifying accounts of the company for FY 2013 as the Rs 5,600 crore payment crisis at NSEL ballooned.

The audited accounts were to be placed for FTIL's annual shareholder meeting on September 25 but the auditor red-flagged the financial statements and withdrew its report.

"The statutory auditors of the company on September 23 informed that the audit report dated May 30, 2013, on the standalone and the consolidated financial statements of the company for the year-ended March 31, 2013, should no longer be relied upon," FTIL had said in exchange filing.

NSEL, promoted by Jignesh Shah-led FTIL, is facing problems in settling Rs 5,600 crore dues to 13,000 investors after it was forced to suspend trade on July 31 on government directive. The exchange had defaulted on committed payments for the fifth consecutive time last week.

MCX shareholders, on condition of anonymity, said they are concerned over all these developments.

An official of NSEL investor form said there are plans to hold protest outside the venue of MCX AGM.

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 your credibility and reputation which is a key ingredient in meeting the criteria for 'fit and proper' person."

Joseph Massey, MD and CEO of MCX-SX, has already decided to withdraw his request for re-appointment as a director of MCX.

The MCX board also appointed RM Premkumar, the FMC-nominated director, as interim chairman early this month.

This clearly means that FMC will now have a greater say in the functioning of the board. A look at new board will show that four out of eight board members are FMC nominated, a shareholder, Alok Kumar, said.

Investors are eagerly awaiting the outcome of the finance ministry's decision to take action against NSEL as the panel, headed by economic affairs secretary Arvind Mayaram, submitted its report on alleged irregularities in the bourse last week and found many loopholes in the functioning.

The Mayaram panel also called for a CBI, MCA and ED probe into alleged irregularities in the exchange.