Don’t attend board meetings, SEBI tells MCX’s public interest director

Just two days after Shankar Aggarwal, the public interest director (PID) of Multi Commodity Exchange (MCX) said that he would start attending the board and committee meetings of the exchange in public interest, SEBI issued a diktat to restrict him from doing the same.

SEBI has advised Aggarwal not to attend any Board/Committee meeting of the Exchange till further communication, MCX said in a disclosure to the exchanges on May 13. A May 11 disclosure by the MCX had said that Aggarwal would attend the board and other committee meetings of the exchange.

Aggarwal recuses

Aggarwal, a former bureaucrat, had recused himself from attending MCX board and committee meetings in the wake of an interim order by SEBI in the matter involving Dish TV. SEBI had passed an ex-parte order against Dish TV’s three independent directors (IDs) including Aggarwal, BD Narang and Rashmi Aggarwal without giving them a prior hearing.

But SEBI has restricted only Aggarwal from attending the board and committee meetings of MCX, while there is no such restraint against the other IDs of Dish TV on their attending meetings in other companies.

Dish TV saga

SEBI member SK Mohanty had passed an ex-parte interim order on March 7 to freeze the demat accounts of the three IDs holding them responsible for Dish TV’s failure in disclosing the voting results of an annual general meeting (AGM) held on December 30, 2021. Replying to SEBI’s interim order, the three IDs told the regulator that it was against the principles of natural justice since they were not giving a hearing. Also, immediately after SEBI’s March 7 order, Dish TV had declared the results.

The IDs told SEBI that the matter had not reached the company’s board and hence they were not aware of it and neither SEBI made any attempt to bring it to their attention. It has been more than 45 days since SEBI heard the three IDs in March, but the regulator is yet to issue its final order. In the past, courts have told SEBI to use its powers to pass ex-parte interim orders sparingly and only in emergency situations.

Aggarwal, based on his seniority, was next in line for the MCX chairman’s post, which will fall vacant since incumbent Saurabh Chandra’s tenure ends in a few weeks. As the head of MCX audit committee, Aggarwal had made a suggestion for a deeper investigation into the forensic audit report regarding data sharing by the exchange with IGIDR professors.

Before SEBI’s diktat, Aggarwal attended the crucial regulatory oversight and technology committee meeting held between May 11 and May 13. MCX did not reply to an email query.

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