MF Global Sify Securities India Pvt. said its equities and commodities broking businesses in the South Asian nation are unaffected by its U.S. parent’s filing for bankruptcy protection yesterday.
“There is a joint venture with Sify and therefore it does not result in an automatic wind-up of the asset,” Managing Director Vineet Bhatnagar said in a telephone interview in Mumbai today. “The business in India is well-capitalized and remains unaffected.”
MF Global Holdings Ltd., run by former New Jersey governor and Goldman Sachs Group Inc. co-chairman Jon Corzine, filed for bankruptcy less than a week after reporting a record quarterly loss and disclosing a $6.3-billion wager on European sovereign debt. MF Global controls 70 percent of the Indian venture and Sify Technologies Ltd. owns the remainder, said Bhatnagar.
“MF Global’s stake will be transferred to someone else and Sify also has an option to buy the remainder,” he said. The unit “is a portfolio asset of a foreign owner, which will be monetized,” said Bhatnagar.
Sify Technologies Chief Financial Officer M.P. Vijay Kumar said the company is evaluating options.
“There will be more clarity in a week’s time on what MF’s credit obligations are,” he said. “That will help us decide on our next course of action.”
MF Global Sify Securities has an authorized capital of $14.5 million, according to its website. The company has more than 300 employees and is not cutting jobs, Bhatnagar said.
Man Group Plc. bought the Indian subsidiary of Refco Inc. in November 2005 after purchasing assets of the bankrupt U.S. trader. The venture was renamed Man Financial-Sify Securities India Pvt. MF Global, formerly part of Man Group Plc, became a public company in a 2007 spinoff.