The board of Multi-Commodity Exchange of India has decided to ask market regulator Sebi to relax the 2 per cent lock-in cap on its promoter FTIL to enable the latter to sell entire 5 per cent MCX stake via a block deal and comply with various regulatory orders.
The largest commodity bourse has decided to move Sebi seeking a waiver of the 2 per cent stake sale cap clamped on FTIL. According to the exchange, this cap prevents FTIL from exiting MCX completely.
"If this cap is removed, FTIL can sell its remaining 5 per cent stake in the exchange even via a block deal," a board member said.
It may be noted that commodity regulator Forward Markets Commission (FMC) and the exchange promoter FTIL have already requested Sebi to waive the 2 per cent cap on the company, which is preventing it from exiting MCX.
After the crisis broke out in its group company National Spot Exchange Ltd (NSEL), which pulled all the group companies inclusing MCX and FTIL into a vortex of regulatory probes and financial difficulties, Sebi had removed the lock-in on FTIL's 18 per cent stake in the MCX.
The Jignesh Shah-promoted FTIL had missed the four-week deadline last week to divest its stake.
The commodity market regulator FMC had asked MCX to ensure that FTIL divested its stake in the exchange, as it was declared "not fit and proper" to run the exchange and had been asked to bring down its stakes in all exchanges to below 2 per cent.
The FMC had taken stern action against FTIL in the aftermath of the Rs 5,600-crore scam reported in the group commodity exchange NSEL.
Last month, FTIL had sold 15 per cent of its 26 per cent stake to Kotak Mahindra Bank for Rs 459 crore. Again it had sold another 6 per cent to different entities, including 2 per cent to big bull Rakesh Jhunjhunwala, and about 4 per cent in the open market.
The MCX board is also working with Kotak Mahindra Bank to renegotiate the terms of agreement of the contract in light of the PwC report.
The board has decided not to depend on any single vendor for software in the future and wants an exit clause on software to be reworked. It wants a new technology agreement with FTIL to be in place for 10 years, sources said.