Trouble-ridden Financial Technologies (India) Ltd plans to drag the board members of its subsidiary Multi Commodity Exchange to court over the proposed preferential issue.
On Monday, MCX announced that the board of directors will meet on Thursday to consider preferential allotment of shares. However, it did not name investors interested in the allotment.
Reacting to the development, Financial Technologies, which does not have any representation in the exchange despite owning 26 per cent stake, said its board would take necessary legal action in the interest of its 65,000-plus shareholders.
FTIL alleged that MCX is planning the preferential issue at a time when it has initiated action to divest its stake up to 24 per cent.
“Such a move is vindictive in nature to support certain vested interests and deprive FTIL of a level-playing field to sell its shares,” said Financial Technologies in a statement on Monday.
Last December, the commodity markets regulator Forward Markets Commission declared MCX promoters FTIL as not ‘fit and proper’ to operate commodity exchanges and directed them to bring down their stake to 2 per cent from 26 per cent in MCX. This action came after the National Spot Exchange, a subsidiary of Financial Technologies, failed to settle trades worth ₹5,600 crore entered on its platform.
“It appears that the move by the MCX board is an attempt to derail FTIL’s attempt to divest its equity in a fair and transparent manner,” said the technology company and added that this was with a clear agenda to deny FTIL its rights at any cost.
The Bombay High Court is hearing a petition by FTIL challenging the FMC order declaring it not ‘fit and proper’ to run a commodity exchange.
“Without prejudicing our rights, FTIL has already announced its commercial decision to divest its equity holding in MCX and received good response from various investors as initial expression of interest,” said FTIL.
Miffed over MCX inaction to implement its order, last week FMC warned the exchange that it will not approve new contracts for trading if Financial Technologies does not bring down its stake to 2 per cent by April 30.
On Monday, while the shares of Financial Technologies closed 0.44 per cent lower at ₹373.35, MCX closed 0.93 per cent higher at ₹490.10, on the BSE.