Money & Banking

MCX data breach: No charges against former MD

PALAK SHAH Mumbai | Updated on July 27, 2021

Mrugank Paranjape, former MD and CEO of Multi Commodity Exchange (MCX)

MCX board is of the view that it could not find enough evidence to take the matter forward, say sources

Mrugank Paranjape, the former MD and CEO of Multi Commodity Exchange (MCX), will not face any further charges for the alleged data breach scandal that rocked the exchange during his tenure in 2016. The MCX board, which met last Saturday, has decided to hold back Paranjape’s variable pay for the year.. There will be no further inquiry or charges levelled against Paranjape or anybody else into the matter, sources told BusinessLine.

The alleged theft of market data at MCX and its use by unauthorised persons was the second major incident of breach at any exchange in India after the National Stock Exchange (NSE) algo trading scandal came to light.

Also read: MCX holds back former MD’s salary in data breach case

In both the cases, the involvement of key people and a Mumbai-based research institution Indira Gandhi Institute of Development Research (IGIDR) had come to light. A forensic audit report by New Delhi-based firm TR Chaddha and Co had mentioned in its report that data shared by the MCX with Susan Thomas, a professor with IGIDR, could have gone into algorithmic trading and even accessed by unauthorised persons.

Professor Thomas is the wife of Ajay Shah, one of the accused in the NSE Co-location scam. However, MCX board is of the view that it could not find enough evidence to take the matter forward, the sources said.

‘Censure order’

“It is likely that MCX could pass a censure order in the data breach matter,” the source said. Censure is a formal and public act intended to convey that the persons concerned have been guilty of some blameworthy act or omission.

Also read: MCX probing ‘abuse’of pact with IGIDR

BusinessLine first broke the story in 2018 about the forensic audit that revealed how the MCX shared data via ‘private undertaking’ with Thomas and Chirag Anand, a Delhi-based algo software designer. The case was in a limbo since the forensic audit was submitted. The exchange had also sought explanation from some of the other employees in the exchange.

MCX has also conducted an internal inquiry regarding the purchase of land by it at the Gujarat International Finance-Tech (GIFT) City in Gandhinagar when Paranjape was at the helm. Sources told BusinessLine that more land was purchased than was formally approved by MCX board or its committee.

Another incident where the role of Paranjape and a senior board member was under the scanner was the award of a multi-crore software development contract to a London-based firm for a spot exchange platform. “In all these matters, MCX has decided not to hold anybody responsible for the lack of evidence,” the sources said.

When contacted, Paranjape said, “I have not received any communication from MCX and hence I’m not aware of anything. I’m not saying anything more.” MCX did not respond to an email query from BusinessLine

Published on July 26, 2021

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