FTIL, MCX crack over 8% each in two trades, CBI names ex-Sebi chief Bhave in probe

MUMBAI: Shares of Financial Technologies (FTIL) and Multi Commodity Exchange (MCX) extended losses for the second straight session after the CBI registered a Preliminary Enquiry (PE) against Jignesh Shah-founded FTIL and MCX, former Sebi Chairman C B Bhave and ex-member K M Abraham, among others.

According to the CBI, the PE was registered on issues of alleged irregularities in granting sanction to the MCX Stock Exchange (MCX-SX) by the Securities and Exchange Board of India in 2008 and renewing the recognition in 2009 and 2010.

MCX-SX was set up by Jignesh Shah-led FTIL and its commodity exchange arm MCX and began functioning as a full-fledged stock exchange last year after a prolonged battle with SEBI.

Meanwhile, the Chairman and other 'public interest directors' of MCX-SX have expressed their desire to quit in the wake of a preliminary enquiry registered by the CBI yesterday into grant of licence to the exchange way back in 2008 and the subsequent renewals.

The stocks had corrected in last session as the CBI carried out searches at offices of National Spot Exchange, residential premises of five PEC officials, two of NSEL officials and one of private persons.

According to analysts, the news of raids being carried out has definitely broken the uptrend these two stocks were witnessing in the rallying market.

“The stocks had picked up momentum after market reports that big entities like Tech Mahindra, L&T and Kotak were interested in taking over the company. However, there is no official communication from interested parties on this. The raid will weigh on investors sentiment and will keep interested buyers away till the issue is resolved. Expect the stocks to correct further in coming sessions,” said Manisha Gupta -Currency and Commodities, ET Now.

Vineet Nayyar, Executive Vice Chairman, Tech Mahindra in an interview to ET Now made it clear that his company was not interested in acquiring Financial Technologies.

At 12:30 p.m.; Financial Technologies was at Rs 362.40, down 4.17 per cent, on the NSE. It touched a high of Rs 375 and a low of Rs 359.25 in trade today.

MCX was at Rs 491.90, down 4.82 per cent, on the NSE. It touched a high of Rs 501 and a low of Rs 465 in trade today.