Reliance Capital slams MCX for non-cooperation in FTIL stake sale
New Delhi: Reliance Capital, the top bidder for shares held by Jignesh Shah-led Financial Technologies in Multi Commodity Exchange (MCX), has complained to the regulator about "lack of cooperation" and non-sharing of vital information by the bourse and the seller.
However, both Multi Commodity Exchange of India Ltd and Financial Technologies India Ltd (FTIL) said they have thoroughly cooperated with the bidders. MCX said it has shared all information, except "any unpublished price-sensitive information."
In a strongly worded letter to the Forward Markets Commission (FMC), copies of which were sent to FTIL, MCX and the Finance Ministry, Reliance Capital said it is very keen to acquire the stake in the top commodity exchange, but is disappointed with the process followed by the seller and the "lack of cooperation by MCX in providing critical information to potential investors."
When contacted, Reliance Capital declined to comment. An FTIL spokesperson said, "FTIL board will meet and take a decision on the matter very soon and we will convey the same to all its stakeholders."
"FTIL is fully cooperating with all the interested investors and its merchant banker is following the same standards for all," the spokesperson added.
An MCX spokesperson said in a statement "it has been thoroughly cooperative with the bidders, and has shared information to the extent possible. The law does not permit us to share any unpublished price-sensitive information, including part of PWC report with any person(s) selectively."
The regulatory officials, however, said Reliance Capital has also requested the FMC to assume full control over the entire process related to this divestment to ensure that it is conducted in a "reasonable and transparent manner."
Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group, has also listed other concerns with regard to the stake sake and has sought an urgent meeting with the FMC Chairman to discuss these issues.
The concerns include those related to "several" party transactions between FTIL and MCX, potential taxation issues, technology contracts and concerns arising out of a PWC forensic investigation conducted on MCX on the FMC's directions.
Reliance Capital has requested the FMC to share a copy of the PWC report with potential investors before executing any binding agreement.
Shortlisted investors, including Reliance Capital, had been asked to execute a binding share purchase agreement by today. However, Reliance Capital has said it would not be able to do so due to lack of "critical information."
Among the potential investors, Reliance Cap has emerged as the highest bidder, while others reported to be in the fray include Kotak Mahindra Bank, BSE, Tata Capital, CME, Deutsche Boerse, DGCX, Warburg Pincus and Medist.
FTIL, which has a 26 per cent stake in MCX, has to sell 24 percent.
FTIL has been declared not 'fit and proper' to hold more than a 2 percent stake in the commodity bourse by the FMC, following a Rs 5,500 crore payment crisis at subsidiary National Spot Exchange of India Ltd, which started in July last year.