SKS Capital and Research, which had entered into an agreement to buy warrants of MCX Stock Exchange from Financial Technologies India, has withdrawn from the deal.

FTIL issues statement

In a statement issued on Wednesday, FTIL said one of the investors SKS Capital and Research has expressed its inability to purchase the warrants and accordingly both the companies have agreed to terminate the agreement. FTIL has also said 2.71 lakh equity shares of MCX-SX were transferred to Rakesh Jhunjhunwala.

Besides, 38.48 crore warrants have been transferred to a group of investors and converted into equity shares. Incidentally, one of the investors Uday Shah has agreed to purchase additional 50 lakh warrants, it said.

Post-execution of the share transfer, the balance 17.27 crore warrants will be transferred to an escrow agent in terms of warrant purchase agreement and the said warrants will be transferred to the investors from the escrow account according to terms and conditions of escrow agreement, it said.

Approval needed

Earlier this month, the board of directors of MCX Stock Exchange issued equity shares to 12 new investors, subject to post facto approval from the Securities and Exchange Board of India.

FTIL has to offload its stake in the exchange after it was declared not ‘fit and proper’ to hold stake in any exchange. Last year, one FTIL group company, National Spot Exchange, failed to settle trades worth ₹5,600 crore entered on its trading platform.

In August, MCX-SX cancelled warrants held by FTIL and transferred the non-refundable interest-free deposit of ₹56.25 crore raised against these warrants to the capital reserve and increased its networth to ₹160 crore from ₹110 crore.

This move helped the stock exchange meet SEBI’s minimum net worth criteria of ₹100 crore and helped renew its licence in September.

The market regulator has clarified that FTIL, which was declared ‘not fit and proper’ to hold stake in any exchange, should divest its stake.

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