Stocks

MCX CC: Extension for Ahlawat as MD/CEO hangs in the balance

Mumbai | Updated on December 29, 2020

MCX chief seeks SEBI’s opinion

An extension of term to Narendra Ahlawat, MD and CEO of MCX Clearing Corporation (MCX CC), is under discussion. His three-year term is to end in mid-2021 but has come up for renewal early because Ahlawat’s 2018 appointment as MD and CEO of MCX CC has been pending ratification as per the Companies Act.

In January, BusinessLine reported that Ahlawat’s current appointment was erroneous as it was required to be ratified in the immediate EGM or the annual general meeting. This did not happen.

MCX CC is a fully owned arm of Multi Commodity Exchange (MCX. According to sources, there is a view within MCX that granting an extension to Ahlawat has legal complications. PS Reddy, MD and CEO of MCX, has sought SEBI’s opinion in the matter, the sources said.

However, opinion is divided since another key director on the board of MCX CC has expressed his approval to grant an extension to Ahlawat, the sources said.

Gift City site: Controversial

This year, the MCX conducted an internal enquiry on purchase of office space by the exchange at Gandhinagar-based Gujarat International Finance-Tech (GIFT) City. It was to house the disaster recovery (DR) site of the exchange. But the purchase became controversial since it fell in the same ‘seismic zone’ as the old or existing MCX DR site and, hence, defeated the purpose of the new DR site.

In his earlier role, Ahlawat was the chief regulatory official at MCX and had even written a letter to a ‘junior’ staff member about the issues related to purchase of office space at GIFT city. But as his role demanded, Ahlawat did not escalate or flag the matter to the higher-ups or the board, sources said.

‘data breach’

A CRO is a key management person in an exchange. This apart, MCX is already investigating a massive ‘data breach’ at the exchange between 2016 and 2018. A forensic report pointed out that confidential trade data was shared by MCX with Susan Thomas of Indira Gandhi Institute of Developmental Research and an algo trader from Delhi. In this case, too, MCX is probing Ahlawat and former senior officials.

Emails sent to MCX, MCX CC and SEBI remained unanswered. Messages sent to Ahlawat and Reddy were also not received any reply.

Published on December 29, 2020

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