Commodity exchange MCX today said its shareholders have approved changes in the bylaws empowering the bourse to take necessary steps to ensure FTIL reduces its stake to 2 per cent from the existing 26 per cent.
In a filing to the BSE, MCX said its shareholders have given approval special resolutions to alter the main object of the ‘Memorandum of Association (MoA)’ and also the ‘Article of Association (AoA)’ following the directions of commodity markets regulator Forward Markets Commission (FMC).
In the May 9 order, the FMC had revised shareholding norms as well as fit and proper criteria for shareholders to run national commodity bourses. It had also directed exchanges to amend their MoA and AoA to comply with the order.
Financial Technologies India Ltd (FTIL), erstwhile promoter of MCX, has been declared unfit to run the commodity bourse after the Rs 5,600 payment crisis surfaced at its subsidiary National Spot Exchange Ltd (NSEL).
As per the changes made to the AoA, MCX will get more powers to take actions if a shareholder, who has been declared as unfit to run the exchange, fails to divest its stake as per the FMC shareholding norms.
MCX has included ‘Article 26C’ in the AoA that reads: “The company shall take necessary steps as it may deem fit so as to ensure that shareholding of such person (who declared as unfit) is divested forthwith upon such direction or order of a competent authority.”
On being declared as not fit and proper person to continue to hold the shares of the company, MCX may call upon the concerned shareholder to divest his shares forthwith.
As per the amendment, MCX has got powers to extinguish the voting rights and freeze the beneficiary account of FTIL.
That apart, the Board of Directors has the power to transfer such shares immediately to an escrow account.
MCX is under pressure to ensure FTIL reduces its stake as the regulator has stopped giving approval for launching of new contracts beyond August.