FTIL gives extra two weeks to submit final bids for MCX stake

New Delhi: Jignesh Shah-led FTIL, which is divesting its stake in MCX, said the board has given an additional two weeks to shortlisted investors to submit their final bids.

"The board deliberated on the divestment process and decided further time needs to be given in the light of the developments that have come on May 9," Financial Technologies (India) Ltd (FTIL) said in a filing to the BSE. The MCX has decided to amend its articles of association to comply with the regulator's new shareholding norms for Indian commodity exchanges. The guidelines include a requirement for entities declared unfit to run an exchange to divest their entire stake immediately. "The board decided to give two weeks time to complete the discussions and negotiations with the bidders and attain the final bid," it said.

The board said all shortlisted bidders continue to be interested in the divestment. The next board meeting is scheduled on May 24, it added. FTIL was ordered to reduce its stake in Multi Commodity Exchange of India (MCX) after the Forward Markets Commission, the regulator, declared it unfit to run any exchanges in December last year. The company was required to pare its stake to 2 per cent from the existing 26 per cent following the Rs 5,600 crore payment crisis at the National Spot Exchange Ltd.

FTIL owns a 99.9 per cent stake in NSEL, which suspended spot trading in commodities and has been unable to settle payment of dues to investors. The sale of stake in MCX has been delayed because bidders sought more time in view of a PwC audit report on related-party transactions between the commodity exchange and FTIL group firms. FTIL said the board also took note of developments of the past few weeks, including the sharing of the executive summary of the PwC audit report and the separate clarifications issued by both FTIL and MCX on the report. The FTIL board deliberated on the resignation of MCX Managing Director and CEO Manoj Vaish and discussed the revised shareholding norms issued recently by the FMC for national commodity bourses. Shah and former MCX head Shreekant Javalgekar were arrested on May 7 in the NSEL case, seven months after an FIR was lodged.