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Metropolitan Stock Exchange (formerly MCX Stock Exchange) has called for a board meeting on Saturday to appoint a new managing director and CEO with the incumbent Saurabh Sarkar deciding to move on for better prospects.
The board may consider appointing MCX Clearing Corporation’s Udai Kumar as interim MD and CEO of the exchange. The move would not only help the exchange tap into in-house talent, but also reduce costs in the near-term as Kumar’s take home salary is about ₹55 lakh a year, while Sarkar commands an annual salary of ₹1.80 crore.
The board will also discuss means to halt the erosion in net worth due to loss of ₹1 crore incurred monthly.
The exchange might resort to some cost-cutting measures as it is currently spending ₹2 crore to generate an income of ₹1 crore monthly, sources said.
The exchange has a net worth of ₹124 crore after providing ₹25 crore to its subsidiary MCX Clearing Corporation for enhancing its net worth to ₹75 crore. The exchange failed to meet the SEBI deadline for increasing the clearing corporation net worth to ₹100 crore by September.
SEBI’s directionEquities and commodities market regulator SEBI has now given the exchange three to six months time to infuse ₹25 crore fresh capital in the clearing corporation.
The regulator has also made it mandatory for exchanges to have a clear net worth of ₹100 crore making it impossible for exchanges to raise any loans against funds set aside as net worth. Meanwhile, it was reliably learnt that MCX has called for a board meeting on October 20 to increase its holding in Metropolitan Stock Exchange to 15 per cent. MCX currently holds 3.42 per cent stake in the stock exchange and has warrants worth ₹42 crore. Since the warrants were not converted into equity shares before its deadline, the stock exchange cancelled the warrants in June and transferred the amount to its networth.
MCX had filed a case against the stock exchange in the Bombay High Court seeking refund of ₹42 crore.
Incidentally, the case came up for hearing on Thursday and was adjourned to Tuesday.
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