The board of directors of MCX has decided to share the summary of PricewaterhouseCoopers report public through BSE and NSE on Monday.  The decision was taken at a board meeting here on Saturday.

“Being price sensitive information, the PwC audit report cannot be disclosed selectively to the nine bidders. Without revealing the report the bidders would not be able to arrive at a price for bidding. So it was decided to put the summary and not the entire report produced by PwC through the capital market websites since MCX is a listed entity,” said a source close to the development.

Asked when the report will be uploaded on the BSE and NSE websites, he said it would be done either on Monday or Tuesday. The decision comes at a time when Reliance Capital has filed a complaint with commodity market regulator Forward Markets Commission that the management of MCX is not revealing vital information.

MCX TO SEEK MORE TIME

Meanwhile, the management of MCX is preparing a letter requesting the Forward Markets Commission to extend the April 30 deadline for divestment of 24 per cent stake by its parent Financial Technologies. In March, FMC had said that it will not approve launch of any new contract on MCX trading platform if FTIL fails to bring down its stake to two per cent by April 30.

“We are in process of listing out the latest developments to prove the intention of the exchange to abide by the regulators ruling. We do not want to be penalised for somebody’s mistake,” said another source.

However, it is not clear whether FMC will consider MCX’s request as it has already given a long rope. In December, FMC declared Financial Technologies (FTIL) and its promoter Jignesh Shah as not ‘fit and proper’ to own stake in commodity exchange after its group company National Spot Exchange failed to settle Rs 5,600-crore trade executed on its platform.

FTIL has said it has formally sought the draft report so that the company can share its views on some of the purported allegations against the company. Neither MCX nor PwC has shared the report or sought out views, it said.

“We would like to point out that all transactions between MCX and FTIL have been clearly disclosed in MCX’s statutory audit conducted by leading auditors for the past 10 years. Also, all transaction between the two companies was clearly based on commercial agreements which were disclosed in detail in MCX’s final red herring prospectus which was filed in 2012, based on which the market regulator allowed MCX’s IPO in March 2012,” said FTIL in a statement.

(This article was published on April 26, 2014)
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