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Market regulator SEBI is reviewing the proposal to re-appoint Amit Goela and Madhu Vadera Jayakumar on the board of Multi Commodity Exchange (MCX).
Although their appointments were approved on August 31 at MCX’s annual general meeting, SEBI is yet to give the regulatory clearance due to pending inquiries and notices with regard to allegations of insider trading against them, sources close to the development told BusinessLine .
Both Goela and Jayakumar were appointed to the MCX board in 2015 and their reappointment came up this year. MCX shareholders, including leading high networth individuals of India, cast more than 90 per cent vote in favour of their re-appointment.
Notice issued
But around two weeks ago, SEBI issued a show-cause notice to key board members of Aptech and people linked to them for insider trading in the company shares. The notice was served to Aptech board members, including Jayakumar, sources told BusinessLine .
Goela is an associate of Rakesh Jhunjhunwala in his company Rare Enterprises. Jhunjhunwala also holds around 4.8 per cent stake in MCX. SEBI is also looking at the conflict of interest angle with regard to Goela’s presence on the board of MCX due to his association with Rare Enterprises, sources said. Goela’s conflict of interest was flagged by news reports in 2019.
As a rule, brokers and large traders are not allowed to sit on exchange boards. This apart, SEBI has an inquiry pending against Goela since 2017 for his role in trading of Reliance Communications shares, the sources said. Earlier, Goela was the Assistant Vice-President-Private Equity, at Reliance Capital Ltd., belonging to the same corporate group as RCom. “There are only two ways in which SEBI will clear the names of Goela and Jayakumar for re-appointment on the MCX board. After a final order is passed or a settlement between the regulator and parties involved in alleged wrongdoing is reached,” said a former SEBI whole-time member.
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