Mumbai: Commodities markets watchdog Forward Markets Commission (FMC) met Multi Commodity Exchange (MCX) officials here Tuesday and reviewed progress made by the exchange in complying with the order to trim parent FTIL's stake to 2 percent from the present 26 percent.
Outgoing MCX Managing Director and Chief Executive Officer Manoj Vaish met FMC officials and discussed the divestment progress, an MCX official said here, without giving details.
The FMC wanted to take a view and decision on MCX's compliance status on implementing the 'fit and proper' order against Financial Technologies (India) Ltd (FTIL) as well as actions taken on the PwC audit report on the exchange.
Earlier, the FMC had warned MCX it would not renew contracts or allow new contracts and would eventually take away its licence to run the bourse if the exchange did not comply with its orders.
FMC arranged the meeting after efforts by FTIL, promoted by entrepreneur Jignesh Shah, to sell a 24 percent stake in MCX appeared to have hit a temporary road block, with potential bidders, including Reliance Capital, demanding that the findings of the PwC audit be shared with them.
Reliance Capital, which is looking at buying a stake in MCX, has also asked the FMC to annul all agreements between the bourse and FTIL.
The FMC, which went into the running of group company National Spot Exchange (NSEL) after a Rs 5,600-crore payment crisis, had issued an order in December declaring FTIL "not fit and proper" to hold more than a 2 percent stake in MCX. Currently, the promoters hold 26 percent in the commodity exchange.
The FMC had asked MCX to take concrete steps to ensure that FTIL reduces its stake to 2 percent in the exchange. Although FTIL set up MCX, it no longer controls the exchange after the FMC's order.
FTIL started the divestment process but could not finalise the bidders on May 2 after potential buyers sought more time to submit binding offers on grounds that the MCX did not provide them with key information.
Earlier, FMC officials said the regulator would also deliberate on the actions initiated by the MCX on the audit report prepared by PwC, which examined if NSEL's arm Indian Bullion Markets Association and FTIL subsidiary National Bulk Handling Corporation traded in MCX shares.
As per the extract of the PwC audit report released last week, MCX entered into agreements with related trading parties and paid about Rs 709 crore to FTIL and its group firms without following proper documentation process.
The MCX had released parts of the PwC report on the BSE with disclaimers that "contents are yet to be independently verified by the company" and "the contents should not be construed to be allegations on the parties named".
However, the FTIL rejected the PwC audit report and said that it would take legal action against the bourse and the PwC for painting a wrong picture.