FTIL contests CBI charges related to setting up of MCX-SX

Financial Technologies today contested CBI charges that it had violated Sebi norms by entering into a buy back arrangement with a nationalised bank while setting up MCX-SX, saying the matter has already been settled by the Supreme Court.
Jignesh Shah-led FTIL also asserted that promoters of MCX-SX did not conceal facts while seeking extension of recognition of the exchange in 2009 from capital market watchdog Sebi.
CBI, yesterday, registered a case against Shah, Sebi officials and its former executive director J N Gupta for allegedly violating laws to grant extension to MCX-SX.
FTIL, which is in the midst of Rs 5,600 crore payment crisis at its subsidiary National Spot Exchange Ltd (NSEL), was the erstwhile promoter of MCX-SX (Stock Exchange).

Shah as well as some of his group firms came under the scanner of multiple agencies including CBI following the NSEL fiasco.
In a statement, FTIL said it would take all necessary steps to protect interests of the company and shareholders.

"The company has decided to make a representation to CBI highlighting the correct facts... And will fully co-operate with the investigation," it said..
According to FTIL, Bombay High Court did not find anything illegal in the buy back arrangement.
"... It was expressly held that the said buy back arrangement is not in violation of the Securities Contract Regulation Act (SCRA), 1956, and the Securities Contract (Regulation) (Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges) Regulation, 2006 (MIMPS)," it said.

This Bombay High Court order was challenged by Sebi in the Supreme Court.
"The Supreme Court passed a consent order. Finally, Sebi granted permission to MCX-SX to undertake the business for all segments in addition to currency derivative segment after being satisfied that MCX-SX has complied with all the legal requirements.
"Thus the matter regarding the alleged violation of SCRA and MIMPS regulations stands adjudicated at the highest judicial level and cannot be re-opened," the statement said.
Regarding alleged irregularities in grant of extension to MCX-SX, FTIL said promoters of the exchange had always believed that the inter-se arrangements amongst the shareholders were legal.