Comments
The Multi Commodity Exchange has dropped its plans to reduce promoters’ stake to 2 per cent from 26 per cent through the issue of preferential allotment on possible fear of drawing investors’ wrath.
Without assigning any reasons, MCX said in a press release said the board of directors in a meeting held on Wednesday decided, for the time being, not to go ahead with the preferential allotment of shares.
It is reliably learnt that MCX’s institutional shareholders, who hold 20-22 per cent stake, rejected the proposal for preferential allotment in a meeting held by Chairman Satyananda Mishra and Manoj Vaish, Managing Director, MCX, last Wednesday.
They felt that the value of their holding will come down substantially and they will vote against the preferential allotment proposal, said a source.
Earlier, the board of MCX adopted amendments to the Articles of Association in a bid to pave the way for transferring Financial Technologies’ holding in the exchange to an escrow account, so that it could be auctioned at a later stage.
Both the amendment to the AoA and the preferential allotment are special resolutions and need approval of three-fourth of the shareholders. So these cannot be passed without FTIL’s approval as its 26 per cent holding is still valid, said market sources.
The board of MCX has been under pressure to meet the commodity market regulator Forward Markets Commission directive to reduce the stake of FTIL to two per cent before the April 30 deadline.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.