New Delhi: The Securities and Exchange Board of India (Sebi) on Wednesday directed Jignesh Shah-led Financial Technologies India Ltd (FTIL), to sell its shares in MCX-SX and other exchanges within 90 days on the ground that it did not meet the 'fit and proper' criteria required for a shareholder of an exchange.
“A person who is not ‘fit and proper' to hold shares in commodity future exchange cannot be a ‘fit a proper person' to hold share in the recognised stock exchange and the clearing corporation. He poses same danger to the interest of securities market as to the commodity futures market as both the markets require the same standard of integrity,” the Sebi order said.
The basis for Sebi's ruling is an earlier order by commodity market regulator Forward Markets Commission (FMC), declaring FTIL not 'fit and proper' to hold more than 2 per cent in commodity exchange MCX, because of its actions in managing troubled commodity spot exchange NSEL, which is facing a Rs 5,500-crore payment crisis.
The Sebi order came a week after the CBI filed preliminary enquiry against former Sebi chairman CB Bhave and director KM Abraham for lapses in granting approvals to MCX-SX.
“Commodity future exchange and stock exchange basically discharge similar functions and obligations except that the two exchanges deal in different underlyings – physical commodity being underlying in the commodity futures exchange and the securities being the underlying in the stock exchange,” Sebi said.