Dec. 26 (Bloomberg) -- Financial Technologies (India) Ltd., the founder of the Multi Commodity Exchange of India Ltd., was asked to cut its holding in the bourse after the regulator said it was unfit to own a controlling stake.
The MCX board today advised Financial Technologies to implement the Forward Markets Commission’s order by reducing its stake from 26 percent to 2 percent or less, within a month, the company said in an exchange filing.
The Forwards Markets Commission, the commodities futures markets regulator, last week declared Financial Technologies Chairman Jignesh Shah and former MCX Managing Directors Joseph Massey and Shreekant Javalgekar as ineligible to hold any post in the bourse. Financial Technologies is the largest shareholder in MCX with a 26 percent stake.
The regulator ordered a review of Shah and his company’s ability to run MCX in October after a payment default at a spot exchange for commodities founded by him prompted the government to suspend trading. Police probing the payment crisis at the National Spot Exchange Ltd. have seized properties and shares worth $487 million from exchange officials and defaulters that may be used to clear dues to investors.
Shares of MCX, which have slumped 68 percent this year, rose 0.1 percent to 473.15 rupees at the close in Mumbai trading. Financial Technologies, which plunged 68 percent since July 31, when NSEL suspended trading in most commodities, climbed 0.6 percent to 173.40 rupees.
Financial Technologies, Shah, Massey and Javalgekar will not be allowed to hold a stake in excess of specified limits or management positions in any government recognized association or exchange, the regulator said. A person shall be deemed “fit and proper” to run a bourse if he or she has a general reputation and record of fairness, integrity and is not involved in any action of fraud and dishonesty, according to the commission.
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