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Jignesh Shah, promoter of troubled National Spot Exchange Ltd (NSEL), has stepped down as Non-Executive Vice-Chairman of MCX with immediate effect.
“I do not want any event to undermine its (MCX) reputation and want to ensure that the shareholder and investor interests are not harmed by the mud-slinging done on the Group,” Shah said in a statement.
“I hope that they (new MCX board) will do justice to the growth opportunities ahead of them and I will see the institution grow from a distance for the rest of my life,” he said.
Shah, who recently quit from the board of MCX Stock Exchange, also heads Financial Technologies as Chairman and Group CEO. MCX recently initiated the search for a new Managing Director after Shreekant Javalgekar put in his papers.
Meanwhile, the three directors of Multi Commodity Exchange and Financial Technologies, the promoter of NSEL, have responded to the show-cause notice issued by the Forward Markets Commission in the ‘fit and proper’ case.
Shah, referring to the show-cause notice, said a detailed reply has been filed addressing all the concerns raised by the regulator.
“The NSEL crisis has destroyed everything that I have worked hard to build over past two decades. My loss is not just financial but what hurts me and my family most is the concerted effort to destroy my credibility..,” he said.
The Financial Technologies Group plunged into deep crisis after National Spot Exchange failed to settle trade worth Rs 5,600 crore entered on its platform. The exchange shut trading abruptly on August 1.
In a 180-page response to the FMC show cause, Financial Technologies and Shah have argued that the regulator should wait for the outcome of the investigation being done by various agencies in the National Spot Exchange issue before taking a call on the fit and proper criteria.
Pending final outcome of NSEL investigation, Shah has agreed not to involve himself in the selection of new FTIL nominee on MCX board, said a source.
Confirming that the Commission has received the response, Ramesh Abhishek, Chairman, Forward Markets Commission, said the outcome of criminal investigation carried out by the Enforcement Directorate of Mumbai police has no bearing in the ‘fit and proper’ case.
“A decision would be taken soon after going through the reply,” he assured.
Financial Technologies has argued that the forensic audit on NSEL has not blamed the company for the NSEL mess. Joseph Massey and Javalgekar have said no action should be taken against them as they have already resigned from MCX.
> suresh.iyengar@thehindu.co.in
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