Financial Technologies, the promoter of MCX Stock Exchange (MCX-SX), has repaid Rs 180 crore to IFCI as it could not meet a clause in the sale agreement signed on July 18, 2009.
“The said sale was subject to a customary price re-set pursuant to which the excess amount of Rs 179.69 crore has been repaid to the purchaser (IFCI),” the FTIL has informed the BSE
The company had sold five per cent stake in MCX-SX to IFCI at Rs 35 a piece with a rider that assured a price reset if Financial Technologies could not offload shares at a higher price by March 31. The IFCI deal was the second round of divestment after the company sold 6.48 per cent to Union Bank of India and Bank of India for Rs 87.5 crore.
Financial Technologies shares on BSE were up three per cent at Rs 858 on Wednesday.
Stake increase
IFCI holding has risen from five per cent to 13.23 per cent after MCX-SX adopted a scheme of capital reduction to comply with Manner of Increasing and Maintaining Public Shareholding in Recognised Stock Exchanges (MIMPS) regulation. Financial Technologies and MCX currently hold five per cent stake each in MCX-SX.
“The repayment to IFCI will remove one of the many objections raised by SEBI in giving permanent exchange status to MCX-SX,” said an analyst.
TIFF WITH SEBI
Capital market regulator SEBI in September last year rejected an application of MCX-SX to launch various new products, including stocks and equity derivatives as it was not in “the interest of trade and public interest to allow the application.” SEBI ruling came after the exchange moved the High Court over prolonged delay in considering its application by the market regulator.
The application was rejected on the grounds that MCX-SX had violated MIMPS norms, under which promoters' stake holding was restricted to five per cent. The exchange currently trades only in currency futures while its rivals NSE and United Stock Exchange facilitate trade in currency futures and options.
“The concentration of economic interest in a recognised stock exchange in the hands of two promoters (MCX and Financial Technologies) is not in the interest of a well-regulated securities market,” SEBI had said in its order. “The applicant is not fully compliant with MIMPS regulations as substitution of shares by warrants is an attempt to work around the requirements of the regulation.”
MCX-SX has again moved the Bombay High Court against the SEBI order on rejection of its application.