With just five days left for its merger with SEBI, the Forward Markets Commission (FMC) has declared the promoters and directors of Universal Commodity Exchange as not ‘fit and proper’ to run a commodity exchange.
After a year of operations, the exchange suspended trading in July last year due to adverse market conditions. The merger of FMC with capital markets regulator SEBI will become effective from September 29.
In an order dated September 22, FMC declared Commex Technologies — the anchor investor and promoter of UCX, Skyline Capital — shareholder in UCX, Ketan Sheth — ex-chairman and director, UCX, and Praveen Pillai — MD & CEO of UCX, as not ‘fit and proper’.
FMC said the shareholding pattern of the exchange is in violation of the revised guidelines. The order noted the exchange has wiped out its paid-up capital of ₹100 crore.
Not according to norms FMC said the business affairs of UCX was not conducted according to the commission’s directives and the exchange was managed without any regard for risk management and corporate governance.
FMC also said the reply to its show cause notice was found unsatisfactory.