The Multi Commodity Exchange board could not consider the proposal to issue preferential allotment to bring down Financial Technologies’ stake to 2 per cent.

However, it has adopted the amendment to the Clause of Memorandum of Association and Articles of Association of the exchange at its meeting held on Thursday in Mumbai.

While agreeing unanimously that MCX has to execute commodity market regulator Forward Markets Commission’s order by April 30, the board decided to meet again next week to chalk out an action plan, said sources.

The amendment empowers the MCX board to transfer the 26 per cent stake of FTIL to an escrow account and then auction it, if need be, said sources.

Alteration to the Articles of Association of the company included the rules and processes for disinvestment of stake held by shareholders declared not ‘fit and proper’ or for any other reason arising out of a direction or order of the Government or regulation, said MCX in a press release. Such shareholders will not be entitled to vote in excess of the shares permitted to be held and shall be responsible to dispose of the excess shares within the prescribed time, it said.

Failure on this account will result in the transfer of such excess shares to an escrow account. The company could then take measures, including requesting the depository participant to transfer the shares to the escrow account, and dispose of such excess shares according to the board’s direction, said the release.

With the board adopting the amendment, the exchange has to call for an extraordinary general meeting to get two-thirds shareholder approval, said sources.

In December, Financial Technologies was declared not ‘fit and proper’ by the regulator, which asked it to bring down its stake to 2 per cent from 26 per cent.

The crackdown on the FTIL group began after a group company, National Spot Exchange, failed to settle trades worth ₹5,600 crore entered on the exchange platform.

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