THERE'S A LONG LINE of suitors queueing up for a stake in two exchanges—Multi-Commodity Exchange (MCX) and the MCX stock exchange (MCX-SX)—both subsidiaries of Financial Technologies India (FTIL). The Forward Markets Commission (FMC) recently found the FTIL chairman, Jignesh Shah, and other board members not “fit and proper” to run these exchanges.

Those interested in owning part of these exchanges include Kotak Mahindra Bank and Anil Dhirubhai Ambani Group, both of which have small commodity exchanges but want to go national. Sameer Gehlaut, self-made billionaire and chairman of Indiabulls Group, is another aspirant. He has a toehold in the commodities segment through the Indian Commodity Exchange, jointly promoted by Indiabulls and trading company MMTC.

The FMC order, besides ending Shah’s directorship in the exchanges he created, prevents him from holding such a position in the future. He won’t be able to hold more than 2% in any of the exchanges. But this needs to be ratified by the market regulator, the Securities and Exchange Board of India, which has already served a show-cause notice to Shah, and may ratify the order in the case of MCX-SX.

Meanwhile, the FMC has allowed U.S. private equity player Blackstone to up its stake in MCX to 4.99%, making it the largest non-promoter shareholder; state-owned Industrial Finance Corporation of India has acquired 5% in MCX-SX.

Shah’s other exchanges are also in trouble. The National Spot Exchange or NSEL is defunct. And the fate of Indian Energy Exchange is to be decided by its regulator, the Central Electricity Regulatory Commission. On its part, the government has ring-fenced MCX and MCX-SX by appointing Satyendra Mishra and G.K. Pillai, as chairmen, respectively, of the two exchanges.

So, will it be curtains for Shah? Not quite yet, since he has challenged the FMC’s order in the Bombay High Court. Going to court has given Shah a breather—no further action can be taken against FTIL officials till there’s a ruling.

And if Shah loses? He still has FTIL, some money from the divestment of his stake in various exchanges, and FTIL’s long-term technology deals with various stock exchanges. “He can enter other businesses that don’t have the “fit and proper” clause. It may not be the end of the road for him,” says an insider. Meanwhile, there are two exchanges still up for grabs.

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