Jignesh Shah quits MCX board

01 Nov 2013


Jignesh Shah, the founder of the Financial Technologies group and non-executive vice chairman of MCX, has resigned from the board of Multi Commodity Exchange of India Ltd (MCX), India's largest commodity exchange.

Shah, who is struggling to save his empire from the fallout of the NSEL scam, stepped down from the board of MCX as an FT nominee after he submitted his response to a regulator notice asking him to show cause why he should not be declared not "fit and proper" to be a director and shareholder on the bourse.

Just hours after resigning, Shah, founder chairman, MD and CEO of Financial Technologies (India) Ltd, was ensconced with his core team with which he had built his financial sector group.

Speaking on the issue of FMC's show-cause notice on 'fit and proper', Shah said "A detailed reply has been filed addressing all the concerns raised in the regulator's show cause notice."

Shah has helped develop commodity markets in India and set up MCX from scratch to a globally ranked commodity futures exchange in the world.

The Financial Technologies group, of which Shah is the founder chairman, has 39 companies, including NSEL. But the settlement crisis at the spot exchange this August impacted each one of his companies.

''The NSEL crisis has destroyed everything that I have worked hard to build over past two decades...My loss is not just financial but what has hurt me and my family most is the concerted effort to destroy my credibility and trust for which I have lived by all my life," he said.

Speaking on MCX he said, ''I have worked tirelessly along with my team for creating institutions such as MCX and putting India on the global map. I don't want any event or anything to undermine their reputation and want to ensure that the shareholder and investor interests are not harmed by the mud-slinging that has been done towards the entire range of institutions that have been created by the group."

"I wish the very best to the management and board of MCX for future. I hope that they will do justice to the growth opportunities ahead of them and I will see the institution grow from a distance for the rest of my life." he added.

The NSEL crisis has put at risk currency market platforms of the group in India and abroad at Dubai and Singapore among other places.

Thursday was the last day for Shah to reply to the show-cause notice issued by the regulator Forward Markets Commission on his "fit and proper" status to manage the exchange.

On the show-cause notice a top-level source in the government said, "The writing on the wall is clear. The notice clearly says what is going to happen."

If the reply was unsatisfactory, Shah and Financial Technologies will have to reduce their stake in MCX from 26 per cent to below 2 per cent.

The CEO of the exchange Anjani Sinha and three other officials have already been arrested by the economic offences wing of the Mumbai police. But Shah has claimed the forensic audit on NSEL has not reported any adverse findings on FTIL.

So, only when the charges against NSEL are made can any proceedings on the 'fit and proper' criteria be made against him or FTIL.

"A detailed reply has been filed addressing all the concerns raised in the regulator's show-cause notice," Shah said in a statement.

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