UCX CEO not fit and proper person to run bourse: FMC

Commodity exchange UCX's Managing Director and CEO Praveen Pillai is not a "fit and proper person" to run the bourse due to professional misconduct and financial irregularities, the regulator Forward Markets Comission has said in a order.
After the NSEL fiasco, this is the second time FMC has issued such a ruling and comes less than a week before the regulator's merger with capital market watchdog Sebi.
The stakeholders of Universal Commodity Exchange Ltd (UCX) -- which has been defunct for over a year -- include state-owned IDBI, REC and NABARD.
Pillai's "conduct through the series of events that led to the irregularities and mis-management of funds at UCX, has certainly eroded his good reputation and character, financial integrity and honesty which has adversely affected his status as a 'fit and proper person' to be a Managing Director and CEO on the board of a regulated exchange," FMC said in the order.

In the detailed 50-page order, FMC said that Pillai neither individually, nor any company/entity controlled by him, either directly or indirectly, shall hold any shares in an exchange regulated by the government.
According to the commodity regulator, even prior to his appointment as Managing Director and CEO, Pillai actively associated himself with Ketan Sheth, promoter of UCX, in his misdemeanors, ignoring the conflict of interest he was indulging in at the time of dealing with financial transactions with UCX.
"Praveen Pillai has also failed to comply with the regulatory directives as revealed from the forensic audit report and has grossly failed in managing the affairs of UCX with transparency, fairness and integrity, thereby, prejudicing and threatening the interests of trade and public who participated on its trading platform.

"The aforesaid irregularities at UCX also signifies palpable unprofessional conduct, negligence and malpractice on his part, putting his general reputation and record of fairness, integrity and honesty at serious risk," the order issued on Tuesday said.