Oct. 10 (Bloomberg) -- The vice chairman and the chief executive officer of MCX Stock Exchange Ltd., an Indian equity market that opened eight months ago, quit from the board amid a probe of trading practices at a related commodities bourse.
Vice Chairman Jignesh Shah, the chairman of Financial Technologies (India) Ltd., and CEO Joseph Massey resigned effective immediately, according to a statement e-mailed late yesterday by Mumbai-based MCX Stock Exchange.
Both Shah and Massey were questioned this week by the Mumbai police department’s Economic Offences Wing about National Spot Exchange Ltd.’s failure to settle some commodities trades with investors, the Economic Times reported. Financial Technologies, a Shah-founded company that is NSEL’s parent, also helped create MCX Stock Exchange. Shah is on NSEL’s board and Massey used to be a director at the commodities market.
NSEL suspended trading for some products on July 31 and India barred the bourse from introducing new obligations without prior approval on Aug. 6. The country’s futures-market regulator said NSEL broke rules by allowing the sale of commodities that traders didn’t keep in its warehouses, leaving about 56 billion rupees ($900 million) of trades unsettled.
Shares of Multi Commodity Exchange of India Ltd., the nation’s biggest commodity futures bourses that’s 26 percent owned by Financial Technologies, jumped by the 5 percent limit to 425 rupees at 9:32 a.m. in Mumbai. The stock has plunged 71 percent this year. Financial Technologies rose 4 percent.
Thomas Mathew was named as a public interest director at MCX Stock Exchange by the Securities and Exchange Board of India, the country’s stock-market regulator, according to yesterday’s statement.
MCX Stock Exchange handled about 0.1 percent of India’s equity trading volume during the past month, lagging behind markets run by National Stock Exchange of India Ltd. and BSE Ltd., according to data compiled by Bloomberg.