Manoj Vaish, who was appointed as MD and CEO of Multi Commodity Exchange of India Ltd (MCX) on February 1, has resigned from his position due to health issues, according to a stock market disclosure. The resignation is, however, subject to approval from the board of directors of the company.
Vaish would continue working with the board during the transition period until a new head is appointed, it added.
Apart from MCX, Vaish works as MD and CEO of NSDL Database Management Limited at National Securities Depository Limited, and as an independent director of SBICAP Securities Ltd.
Last December, the Forward Markets Commission declared Financial Technologies India Ltd -- which owns 26 per cent stake in MCX -- and its promoter Jignesh Shah unfit to operate an exchange in the country, in light of the National Spot Exchange Ltd (NSEL) scam. FMC also directed FTIL and Shah to bring down their stake in the exchange to 2 per cent.
The resignation by Vaish comes after FMC’s deadline to ensure compliance with its ‘fit and proper’ order ended and just a day after MCX disclosed the summary of a special audit done by the consultancy firm PricewaterhouseCoopers (PwC). In the report on Tuesday, PwC -- which conducted an investigation on certain areas of MCX’s business under an order by FMC -- raised questions on dubious related party transactions and outright bogus trades on the bourse.
In the report, it also said that Financial Technologies group had about 235 related parties and around 676 additional entities either directly or indirectly related to MCX or the Financial Technologies group, FTIL’s key management personnel or their immediate family members by virtue of being common directors or shareholders. Besides, some entities were found to have received money from MCX either as vendors or as donation trusts.
Moreover, the terms and conditions and the price discovery mechanism for related-party transactions were either limited or not robust, creating doubts whether such transactions were at all done on an arm’s-length basis.
MCX, however, said while making the report’s summary public that it neither agreed nor disagreed with its findings and did not take responsibility for its content.
Jignesh Shah has questioned the timing of the public disclosure of the audit report and alleged that certain parties do not intend to allow FTIL see through its proposed 24 per cent stake sale of the company. The proposed transaction, which has been delayed, will allow FTIL and Shah to meet the FMC dictat.
Earlier, MCX had scrapped a proposed preferential allotment, which would have indirectly diluted the percentage holding of FTIL. FTIL, which is backed by Blackstone, had threatened legal action against MCX as it had not received prior communication for the proposed issue.
(Edited by Joby Puthuparampil Johnson)