FMC issues 'fit & proper' notices to FTIL chief & three others
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FMC issues 'fit & proper' notices to FTIL chief & three others

Last Updated: Saturday, October 05, 2013, 19:14
 
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FMC issues 'fit & proper' notices to FTIL chief & three others
New Delhi: Regulator FMC has issued show cause notices to Jignesh Shah, founder of FTIL, and three other officials following the NSEL payment crisis, asking why they should be considered 'fit and proper' to operate group company Multi Commodity Exchange of India (MCX).

According to sources, the Forward Markets Commission (FMC) issued the notices to four officials, including Shah, Shreekant Javalgekar, MCX Managing Director and CEO, and Joseph Massey, MCX Stock Exchange Managing Director and CEO.

The officials have been asked to reply within two weeks, the sources said. The National Spot Exchange Ltd (NSEL) received the notice today and it is being examined by the group's legal team, they added.

The notices were issued following the Rs 5,600 crore payment crisis at the NSEL, which, along with futures commodity bourse MCX, is promoted by Financial Technologies India Ltd (FTIL).

The NSEL was plunged into a crisis after halting trading in commodities from August 1 on a government directive.

FMC guidelines require exchange board directors to satisfy fit and proper criteria such as a general reputation and record of fairness and financial integrity.

FMC has seven conditions for disqualification, including involvement in acts of fraud or dishonesty and conviction by a court for moral turpitude or economic offences.

A person who is financially unsound and has been declared insolvent or barred from dealing in commodities or from accessing the market by any regulatory authority would be considered for disqualification.

Earlier this week, the Mumbai police registered an FIR against Shah and others in connection with the NSEL payment crisis and raided their offices, residences and warehouses across the country.

Yesterday, the Mumbai police issued lookout notices against Shah and others even as it discovered that half of the warehouses it raided were empty.

PTI



First Published: Saturday, October 05, 2013, 19:14


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