MCX defers controversial preferential issue plan

Multi Commodity Exchange (MCX) on Wednesday said it has decided, for the time being, not to go ahead with its controversial preferential allotment issue.

MCX's board, at a meeting, decided not to go ahead with the controversial preferential allotment of shares issue, for the time being, the Jignesh Shah-promoted exchange said in a statement in Mumbai.

Last week, parent company Financial Technologies India Ltd (FTIL), which holds a 26 per cent stake in the exchange, warned of taking legal action against MCX over the preferential allotment, saying it had not received any communication on the same from the bourse.

FTIL had said it will take necessary legal action to protect the interests of its 65,000 plus shareholders.

At a meeting in February, MCX board had approved a 24 per cent stake sale by FTIL in the exchange, which according to a Forward Markets Commission (FMC) order had to come down to 2 per cent.

On December 17 last year, commodity markets regulator FMC had declared FTIL and its chief Jignesh Shah unfit to run any exchange, including MCX, following the Rs 5,600-crore payment crisis at group company National Spot Exchange Ltd (NSEL).

Last month, capital market regulator Securities and Exchange Board of India (Sebi) also declared that Shah and FTIL were unfit to run any exchange in the country.