The Telegraph
Friday , April 4 , 2014
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Fin Tech tussle with MCX on

Mumbai, April 3: The bitter battle between Multi Commodity Exchange of India (MCX) and Financial Technologies (India) Ltd shows no signs of resolution.

On Thursday, MCX fired another broadside when it proposed that if FTIL was unable to bring down its stake to 2 per cent from the existing 26 per cent within the prescribed time, it should park the excess shares in an escrow account.

The MCX board passed the proposal that made FTIL livid.

“In spite of ongoing communications with MCX and the regulator about the transparent process of divestment of FTIL’s stake in MCX and the timelines within which this will be achieved, we are surprised by the MCX board’s reported decision proposing escrow of FTIL’s holdings,” a spokesperson for FTIL said.

The MCX board also decided that if FTIL failed to park its excess shares into an escrow account, it could take measures that includes requesting depository or depository participant to transfer the shares to the escrow account. The company added that it would dispose of the excess shares in such a manner as “the board may consider appropriate.”

It may be recalled that on March 31, FTIL had opposed a plan of MCX to come out with a preferential offer of shares as it felt that it would derail its own move to bring down the stake through other means. The company had then said that it would take legal action if MCX went ahead with the preferential offer.

However, in the board meeting, MCX deferred the proposal to consider the issue of preferential shares.

The FTIL spokesperson said the company would continue to pursue “peaceful divestment”. If there was any roadblock or measures that would lead to an erosion in the value of its holding, then it would pursue legal measures to protect the interest of its investors.