India operations normal, says MF Global Sify

MF Global Sify Securities, in which collapsed US futures broker MF Global owned 70 per cent stake, was functioning normally, its head told a local television channel on Tuesday.

Managing director Vineet Bhatnagar told the TV channel he was not aware of any discussion to sell MF Global's stake to its partner, Satyam Infoway, which holds the remaining 30 per cent.

“Under the shareholders agreement between MF Global and Sify Securities, Sify has the flexibility to weigh all its options," he said. He could not be reached over telephone despite repeated attempts. An e-mail query to him on the status of the India operations remained unanswered.

Indian stock exchanges are monitoring the developments at MF Global, but have not found any issues with the operations of its Indian unit, stock exchange officials said on condition of anonymity.

MF Global, run by ex-Goldman Sachs chief executive Jon Corzine, filed for bankruptcy protection yesterday, following bad bets on euro zone debt. The brokerage's meltdown week made it the biggest US casualty of Europe's debt crisis, and the seventh-largest bankruptcy by assets in US history.

The London Metal Exchange said day it had suspended MF Global from trading with immediate effect, following a similar move by the CME Group, which operates the Chicago Mercantile Exchange, Chicago Board of Trade and New York Mercantile Exchange.

Bhatnagar described MF Global's 70 per cent stake in the Indian venture as a portfolio holding for the US firm.

“If there is a situation where the receivership in the US results in a process where this 70 per cent in India assets comes for a change of hands, I would imagine this is a very well supervised process in the US,” Bhatnagar said to the TV channel.

Adding: “We are a pure agency broker in India. We don't have any proprietary positions outstanding and we also do not have assets under management.”

In India, MF Global is a trading and clearing member on the Bombay Stock Exchange and National Stock Exchange. It is also a depositary participant on the Multi Commodity Exchange and National Commodity and Derivatives Exchange.

The company has a capital base of $14.5 million (Rs 72 crore), says its website. MF Global Sify offers online and offline equity and derivatives trading for retail customers, as well as execution and clearing services for financial institutions.