Mumbai: The shares of Multi Commodity Exchange (MCX) promoted by Jignesh Shah plunged 17.5 per cent in the intra-day trade on the Bombay Stock Exchange (BSE) following reports that the Central Bureau of Investigation (CBI) began a preliminary inquiry against former chairman of Securities and Exchange Board of India (SEBI) C.B. Bhave, former SEBI member K.M.Abraham and Mr Shah over alleged irregularities in granting of approval to MCX Stock Exchange (MCX-SX) to commence operation in 2008. They also renewed recognition in 2009 and 2010. MCX and Financial Technologies, both promoted by Mr Shah hold 5 per cent equity stake in MCX-SX.
While the CBI inquiry into grant of license to MCX-SX has raised concerns about the future of the stock exchange, Saurabh Sarkar, managing director and chief executive officer of MCX-SX in a hurriedly called press conference said that the exchange had cleared stringent audits by the regulator before being granted the renewal in October 2013.
“We were also granted permission to offer trading in the IRF segment on our platform in January 2014 indicating the confidence of the regulator in the exchange and its systems and processes," he added.
Meanwhile in a separate development,G.K. Pillai, who took charge of the exchange in November 2013 stepped down from the post of chairman citing personal reasons while the the board of MCX-SX, which met here on Friday elected Thomas Mathew, former chairman of LIC the chairman of the exchange and Ashima Goyal, professor at Indira Gandhi Institute of Development Research (IGIDR) as the vice-chairperson of the exchange.
Mr Sarkar also assured market participants that the exchange has successfully ring fenced itself from the Rs 5,600 crore settlement crisis at the NSEL, another entity promoted by Jignesh Shah.
