Markets

MCX holds back former MD’s salary in data breach case

PALAK SHAH Mumbai | Updated on December 06, 2020

Mrugank Paranjape allowed to inspect documents by the exchange

Mrugank Paranjape, former MD and CEO of the Multi Commodity Exchange (MCX), was granted an inspection of documents by the exchange regarding an inquiry against him for an alleged ‘data breach’ at the bourse during his tenure in 2016.

A forensic audit report by New Delhi-based firm TR Chaddha and Co had alleged that data shared by the MCX with Susan Thomas, a professor with the Indira Gandhi Institute of Development Research (IGDR), could have gone into algorithmic trading and even accessed by unauthorised persons.

The probe and forensic audit report was swept under the carpet after Paranjape quit the exchange in 2019. But now, the MCX has issued a notice to Paranjape on the matter and has held back his variable pay due to allegations against him in the report.

GIFT land purchase

The exchange has also conducted an internal inquiry regarding the purchase of land by the exchange in Gujarat International Finance-Tech (GIFT) City in Gandhinagar when Paranjape was at the helm. Sources told BusinessLine that more land was purchased than was formally approved by the board or its committee.

The MCX had purchased the land between 2016 and 2018 for shirting its disaster recovery site. But it is believed that the new land was in the same ‘seismic zone’ where the exchange had its current disaster recovery site, which could make it useless, the sources said.

Paranjape said: “As per my employment contract, MCX owes me money for my previous year employment. Upon raising a demand for the same, the MCX has held the payment back citing two matters: Shifting of the Office and DR Site to GIFT City and engagement with IGIDR. Further, in spite of the current Covid situation, MCX has refused to provide documents to me electronically and insisted that I should personally go to MCX for inspection of documents.”

IGIDR’s Professor Thomas is the wife of Ajay Shah, one of the accused in the NSE Co-location scam.

BusinessLine first broke the story in 2018 about the forensic audit that revealed how the MCX shared data via ‘private undertaking’ with Thomas and Chirag Anand, a Delhi-based algo software designer. The case has been in a limbo since the forensic audit was submitted. The exchange had also sought explanation from some of the other employees in the exchange, sources said.

The MCX did not respond to an email query on Paranjape’s visit for document inspection.

Published on December 06, 2020

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