Multi Commodity Exchange (MCX) has written another letter to market regulator SEBI seeking more time to offload its holding in the MCX Stock Exchange and MCX-SX Clearing Corporation. A similar request sent by MCX in August was rejected by SEBI.

FTIL’s exit likely to help

However, this time around, the commodity exchange is hopeful of getting approval from the regulator, as its promoter Financial Technologies is close to selling the residual 15 per cent stake and exiting the exchange completely after being declared not ‘fit and proper’ to hold stake in stock exchanges.

Apart from the 4.99 per cent equity holding, MCX has 63.41 crore warrants in MCX-SX, which when converted would take its holding in the stock exchange to 33 per cent.

According to Companies Act, warrants have to be converted into equity shares within three years from the date of allotment. MCX has to convert its warrants by June next year. It holds 65 lakh shares of MCX-SX Clearing Corporation.

MCX has reclassified its investment of ₹138 crore in the warrants of MCX-SX and MCX-SX Clearing Corporation from non-current investments to current investments at its carrying value.

“In the absence of sufficient audit evidence to determine a fair valuation of these investments, we have not been able to validate the carrying amount of these investments,” noted the qualified opinion passed by the independent auditor Deloitte Haskins & Sells LLP, in the annual report.

Awaiting right valuation

In March, the Securities and Exchange Board of India had directed MCX to divest its entire holding in both the entities.

Extending the bourse’s recognition for one year, SEBI last week directed the exchange to meet the net worth (undisputed) criteria of ₹100 crore and shareholding norms within three months.

Speaking to the media on the sidelines of MCX’s 12th Annual General Meeting, Satyananda Mishra, Chairman, said the commodity exchange was in the process of appointing a merchant banker to sell the stake and warrants in the stock exchange, provided it gets the right valuation.

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