Amid NSEL crisis, MCX-SX begins search for new CEO

 
MCX Stock Exchange (MCX-SX) has begun its search for a new managing director and CEO to head the bourse, whose group entities remain embroiled in a major crisis emanating from Rs 5,600-crore payment default at the National Spot Exchange (NSEL).

The exchange was set up by Jignesh Shah-led Financial Technologies (FTIL) group, which has also promoted NSEL and commodity bourse MCX, among others.

Earlier this month, Joseph Massey resigned as MD and CEO of India's newest exchange while Shah also had to quit from its board.

In a public announcement on Monday, MCX-SX invited application from "suitably qualified and experienced" candidates for the post of Managing Director and CEO.

It is the country's newest stock exchange and began operations in currency derivatives segment from October 2008 while it commenced operations in capital markets trading in February this year.

MCX-SX said: "The candidate must be qualified in the fields of capital market, finance or management and possessing sufficient experience in related fields for at least 15 years."

The MD and CEO would report to the board of directors and would be responsible for conduct of affairs of the exchange under the direction and supervision of the board. He/she shall also be responsible to perform various functions under the bye-laws, rules and regulations of the exchange and also to comply with various statutory and regulatory requirements, it added.

The appointment will be subject to approval of Securities and Exchange Board of India (Sebi) and the candidate shall hold office for a term of three years which could be extended, the exchange said.

The candidate's age should not be more than 50 years as on October 31, it said adding that age and experience limits may be relaxed for deserving candidates at the discretion of the selection committee.

While renewing MCX-SX's licence for another one year, capital markets regulator Sebi had in September asked the exchange to set up a panel of independent directors to oversee its operations in the wake of questions being raised about 'fit and proper' status of its promoters.

After both Shah and Massey resigned, MCX-SX had said that U Venkataraman, whole-time Director, would assist the special committee of public interest directors in carrying out the functions of the exchange.

The group has seen a string of resignations in the past few weeks at its various entities.

Last week, commodity bourse MCX managing director and chief executive officer Shreekant Javalgekar also submitted his resignation.

EOW likely to defreeze NSEL escrow account on Thursday

The economic offence wing (EOW) of Mumbai Police is likely to defreeze an escrow account of National Spot Exchange Ltd (NSEL) by Thursday morning. NSEL's escrow account was among those 58 bank accounts which was frozen by EOW on Tuesday, to investigate Rs.5,500 crore NSEL payout crisis.

Crisis-ridden NSEL had opened an escrow account after direction by the government to ensure payouts on priority to about 8,000 small investors stuck after the exchange halted trading. But on Tuesday, NSEL failed its payout seventh time in a row - giving a reason that EOW had frozen its settlement and escrow accounts, both.

In an email statement, NSEL had said, "Due to freezing of bank accounts, NSEL is unable to make any payouts on Tuesday. NSEL has informed the FMC of this development. NSEL is taking legal advices to defreeze the settlement bank accounts. Investors and members will be notified in due course."

Talking exclusively to Headlines Today, senior EOW official admitted, "It was our mistake to freeze escrow account on Tuesday. At that point of time, when all 58 bank accounts were getting freezed, we were unaware which are escrow account and which are settlement accounts." But he assured,"

For the benefit of investors, we would defreeze the escrow account at the earliest. Wednesday is public holiday, therefore, on Thursday we would communicate to the bank and will ensure NSEL's escrow account gets defreezed soon."

Interestingly, as of now, NSEL's escrow account has only Rs.18 crore. That means - payout failure was quite imminent. NSEL was supposed to make a scheduled payment of Rs.174.72 crore to investors on Tuesday.

According to settlement plan, NSEL would pay Rs.3,494.4 crore this year in installments of Rs.174.72 crore every Tuesday. The exchange has defaulted on payouts for the past six weeks and has settled about Rs.150 crore so far.

EOW has frozen total 58 bank accounts of promoters of FTIL and NSEL - which also includes personal accounts of Jignesh Shah, Anjani Sinha, Joseph Massey, Shantilal Guru, B D Pawar, Amit Mukherjee, M C Pandey, Shrikant Jawalgekar, Neerav Pandey, NSEL's auditor Mukesh Shah and others.

Read more at: http://indiatoday.intoday.in/story/eow-likely-to-defreeze-nsel-escrow-account-on-thursday/1/312804.html