Members of MCX want promoters to pay them by pledging personal shareholdings

NEW DELHI/MUMBAI: Top executives of the Jignesh Shah-promoted Multi Commodity Exchange (MCX) met members of the exchange in Delhi to reassure them about its future prospects in the wake of the trouble facing the National Spot Exchange, but the gathering turned stormy as many members were worried about the security of their money in the exchange.

MCX members, who are also active in National Spot Exchange, want Shah and other promoters to pledge personal share holdings and assets to make their payments. MCX members, who have deposited 50 lakh each, want the exchange to return their trade guarantee money by Saturday. Also, in view of the controversy surrounding NSEL, they want to appoint an independent auditor to look into the books of MCX to ensure that everything is in order.

On Wednesday, MCX's deputy managing director PK Singhal and business development director Sumesh Parasrampuria met its members in Delhi. Singhal is a former head of Delhi Stock Exchange, while Parasrampuria worked with Motilal Oswal Commodities and Britannia Industries before joining MCX in 2006. Both declined comment on the meeting, but executives said they are visiting various cities to meet members.

At least 75 MCX members attended the meeting called to address the concerns over commodity transaction tax proposed in the Union Budget. However, the meeting turned stormy after MCX members sought various clarifications from the two officials, leading to an abrupt end to the meeting. Many members in fact left before the lunch organised by the exchange.

"We wanted to know if our money is safe with MCX and if the officials have anything to share about National Spot Exchange. But the officials did not respond to our queries satisfactorily. We are willing to give bank guarantee to MCX that has unreasonably made us deposit Rs 50 lakh each in the name of trade guarantee fund," said Vivek Aggarwal of Shri Parasram Commodities. "We will stop trading from next week if MCX does not meet our demand by Saturday," he said.

Agitated brokers said the government must make timely intervention in the operations of MCX, Indian Energy Exchange and MCX-SX, and study its books carefully. Sudhir Bhalla of Ashlar Investment Experts said, "National Spot Exchange should share definite payment schedule with its members, or trading on MCX will come under the clouds of suspicion. Also, Shah should own up responsibility for the problem and let the new board consisting of independent people take control of his exchanges for the time being."