MCX Stock Exchange founder
Jignesh Shah and its Managing Director Joseph Massey resigned from the bourse's board, amid continuing Rs 5,600 crore payment crisis at group company NSEL
which saw its first arrest on Wednesday.
The development comes ahead of extraordinary general meeting of the stock exchange ordered by the market regulator Sebi.
MCX-SX Ltd is promoted by Financial Technologies Group which also runs spot commodity exchange NSEL, which is engulfed in a crisis after it stopped trading on all contracts on July 31 on government directives.
"Jignesh Shah resigned as Vice-Chairman and shareholder-director of the exchange with immediate effect," MCX-SX said in a release. Shah is the promoter Financial Technologies Group.
Massey has also resigned as Managing Director and Chief Executive of MCX-SX, and as shareholder-director with immediate effect, it said.
Thomas Mathew, a former Acting Chairman of LIC, has taken over the affairs of the exchange for the interim period as public interest director, it said.
On Tuesday, Sebi had nominated Mathew as public interest director of MCX-SX.
The market regulator had asked the exchange to hold an EGM in a month's time, when it issued renewal licence to the exchange last month. Accordingly, EGM was held on Wednesday but Shah and Massey resigned before the meeting, sources said.
"As an interim arrangement, U Venkataraman, Whole-Time director, will assist a special committee of public interest directors to carry out functions of the exchange," the release said.
Earlier in the day, Economic Offences Wing (EOW) of Mumbai Police arrested Amit Mukherjee, Vice-President (Business Development) at the troubled National Spot Exchange Ltd (NSEL) for his alleged role in the multi-crore payout scam.
MCX-SX commenced operations in the currency derivatives segment in October 2008 and had court battle with the Securities and Exchange Board for many years before starting equity segment earlier this year.
The trouble for Shah started in July when
the group company NSEL defaulted on its payout of Rs 5,600 crore to its investors. .
Despite attempts by Shah, Chairman and CEO of Financial Technologies Group, to distance himself from the settlement crisis at NSEL, his role as a "key management personnel" at the crippled spot exchange until last year has put him in the direct line of fire.
In a show-cause notice issued by Forward Markets Commission (FMC) last Friday, the regulator pinned the blame for the crisis not just on the exchange management but also a group defined as "key management personnel".
An FIR was filed last Monday by EOW against Shah, Massey, other promoters, directors and defaulters, charging them with cheating, forgery, breach of trust and criminal conspiracy, among others, in connection with the scam.
Shah and Messey appeared before EOW on Tuesday. The EOW officials said as they are in the process of scrutinising the relevant income tax records and will summon the two again.
The EOW has already frozen 58 bank accounts, including those of the crippled exchange and accused named in the FIR.
CBI has started a parallel probe into alleged duping of thousands of customers and irregularities at the NSEL.
Commodity regulator FMC has issued 'fit and proper' notices to Financial Technologies, the promoter of MCX, and Shah.
MCX Stock Exchange founder Jignesh Shah 
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