Parent FTIL opposes MCX preferential share issue

FTIL said that it had not received such communication from MCX and its board will take necessary legal action in the interest of 65,000 FTIL shareholders.

Financial Technologies India Ltd (FTIL) has challenged the decision of Multi Commodity Exchange (MCX) to make a preferential allotment of MCX shares to other investors.

FTIL which holds 26 per cent stake in MCX, said that it had not received any such communication from MCX and the board of FTIL will take necessary legal action in the interest of 65,000 FTIL shareholders. A preferential allotment will bring in more shares in the market, eventually reducing FTIL’s stake in MCX.

“The timing of the announcement by MCX on preferential issue is when MCX is fully aware that FTIL has initiated action to divest its stake up to 24 per cent. Such move is vindictive in nature to support certain vested interest and deprive FTIL of its level playing field to sell its shares,” it said.

According to FTIL, before the final decision by Bombay High Court is taken as to whether FMC is right in declaring FTIL as “fit and proper” or not, FTIL cannot be legally deprived of its rights.

“Without prejudicing our rights, FTIL has already announced its commercial decision to divest its equity holding in MCX and received good response from various global and local investors as initial expression of interests”.

“It appears that the move by MCX board is an attempt to derail FTIL’s move to divest its equity in fair and transparent manner. FTIL sees such move with a clear agenda of depriving FTIL of its propriety rights at any cost,” FTIL claimed. The high court had last month rejected the plea of FTIL and its promoter Jignesh Shah to stay the order of Forward Markets Commission (FMC) asking them to bring down its shareholding in MCX from 26 per cent to 2 per cent.

FMC had directed that neither Shah individually, nor though any entity, either directly or indirectly, should hold any shares in any exchange in excess of the threshold limit of the total paid-up equity capital as prescribed under FMC norms.