Nearly three years after a failed attempt to acquire a software for its spot bullion trading platform, the Multi Commodity Exchange (MCX) recently floated yet another tender inviting expression of interest (EoI) for the same. As per the EoI, the MCX has set a six month deadline for acquiring the software after the contract is signed.

Acquisition of the software for the spot bullion platform by MCX has been under a cloud, as MCX paid around ₹19 crore in advance to a London-based company PESB for the software in 2018 without proper due diligence. MCX had constituted a committee to conduct internal inquiries with regard to the selection of the vendor, signing of contract and payments made in London. But the exchange is yet to fix the accountability even though it is holding back variable and other pay of some of the former senior officials for their role in the matter, sources in the know told BusinessLine.

PSEB moves Court

PSEB, although has failed to provide the software as desired by MCX for three years, dragged the exchange to arbitration proceedings in Singapore in January.

The hurry for MCX to acquire the software now is on the back of market regulator SEBI’s recent move to fast-track the launch of a spot bullion trading in the country for the first time. National Stock Exchange (NSE) and BSE will be leveraged on the strength of their current technology platforms, sources said.

Whistleblower’s red flag

After the EoI was issued by MCX on May 5, Manoj K Sheth, a Chennai based shareholder of MCX, has threatened legal action against the exchange in a letter he wrote to the chairman of the exchange and SEBI.

In the letter, the shareholder has demanded action against the erring officials of MCX for causing loss to the exchange and not presenting a truthful picture of the situation.

MCX will be holding its board meeting this week and the matter is likely to come up there.

Before PSEB dragged MCX to arbitration, a whistleblower had alerted SEBI about the dubious software deal. SEBI said it tried but could not find who the whistleblower was.

Sheth says that after media published the whistle-blower account, he sought answers from MCX in an AGM. “I raised six queries in the last AGM.

Mr Reddy (MCX MD) told me all is well. He said there was no siphoning off funds and software would come. Now, the software is yet to come and money too is gone. Is there no accountability? Why SEBI is silent? On May 18, I sought action against MCX officials who lied and will not hold back in initiating legal proceedings,” said Sheth. An email query sent to MCX on the issue remained unanswered.

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