|Photo: Business Standard|
Wednesday, August 27, 2014
FTIL to 'highlight correct facts' of MCX-SX buyback to CBI
CBI on Monday lodged an FIR against three serving officials and a former one of Sebi, and Jignesh Shah, promoter of FTIL — the erstwhile promoter of MCXSX — alleging that the promoters of the bourse had entered into a buyback arrangement with a nationalised bank, in violation of relevant rules, and "in connivance with Sebi officials, deliberately suppressed this material fact" while applying for an extension of recognition of MCX-SX, to conduct trade in currency derivatives in 2009.
The FTIL stock closed down almost 5% at Rs 259 apiece on Tuesday.
FTIL in its clarification pointed out that the Bombay High Court found "nothing illegal in the said buyback arrangement" while hearing a petition filed by MCX-SX against a Sebi order of 2010 declining to give it permission to operate as a full-fledged stock bourse, other than for offering currency derivatives.
Further, at the time of the extension of recognition of MCXSX in the year 2009, "we understand that MCX-SX only sought time from Sebi for reducing the shareholding to comply with the applicable Sebi regulations.
We understand that at that point of time, no statement/representation was made by MCX-SX to Sebi in its application for extension that it was in compliance with all the relevant Sebi regulations. Therefore, the question of concealing certain facts by the promoters of MCX-SX does not arise," said FTIL.
It further added that as required by law, the application for renewal/extension of recognition was made by MCX-SX and not by its promoters (i.e. FTIL) or Jignesh Shah.