Madras HC to hear plea against MCX payments to London firm on March 8

The controversy surrounding payments made by MCX to a London firm PSEB has now reached the Madras High Court. A petitioner, Manoj Sheth, has made MCX Chairman, Saurabh Chandra; MD and CEO, PS Reddy; and market regulator SEBI, parties to his case that alleges grave irregularities in the payments. Notices have been served to the parties, and some senior MCX officials have also rushed to Chennai, sources said. The court will be hearing the matter on March 8. In 2019, MCX had paid nearly ₹20 crore aas advance to PSEB for the development of a spot exchange software, but the product was not delivered even after two years. The software was delivered by PSEB recently, but the exchange could not use it. MCX has now given the software contract to TCS. MCX had constituted a committee to conduct internal inquiries with regard to the selection of the vendor, signing of contract, and payments made in London at the instruction of senior board members, but the outcome of this investigation has not been made public. Board level and audit committee discussions have also been held on why MCX paid the full amount in advance to PSEB, said sources. An audit was also conducted into the matter by ANB Systems. Usually, only part payments are made to software developers until the job is complete. But the MCX board was in favour of full advance payments, which lacked proper due diligence.

BusinessLine was the first to report on the software deal in 2019 and also how PSEB dragged MCX to Singapore for arbitration in 2021 for additional payments. MCX made these additional payments to PSEB, after which it dropped the arbitration.

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