Bombay Bullion Group Bids for MCX Stake After Regulator Order

January 3, 2014 Leave a comment

Bombay Bullion Group Bids for MCX Stake After Regulator Order

The Bombay Bullion Association, a traders’ group, plans to buy a stake in the Multi Commodity Exchange of India Ltd. after the regulator declared its founder unfit to run the nation’s biggest commodity bourse. The association plans to buy 5 percent of MCX (MCX) via a consortium led by the Universal Commodity Exchange Ltd., another Mumbai-based bourse, from Financial Technologies (India) Ltd. (FTECH), Mohit Kamboj, president of the group that represents about 1,000 jewelers and traders, said yesterday. The 5 percent MCX stake may be valued at 1.25 billion rupees ($20 million), he said.Bombay Bullion has written about its interest in MCX to regulator Forward Markets Commission that last month declared Financial Technologies Chairman Jignesh Shah ineligible to hold any post in the bourse. MCX’s board on Dec. 26 advised Financial Technologies to within a month comply with the regulator’s order that the founder cut its holding to 2 percent.

The regulator ordered a review of Shah and his company’s ability to run MCX in October after a payment default at the National Spot Exchange Ltd., a spot bourse for commodities founded by him, prompted the government to suspend trading.

The turmoil at NSEL began with the government seeking details on the exchange’s settlement cycle on July 14, and deepened with the suspension of most contracts on July 31. The exchange failed to meet most of the payment targets set under the supervision of the FMC. While MCX held no stake in NSEL, it was controlled by Financial Technologies, which also owns exchanges in Bahrain, Botswana and Dubai.

An MCX spokeswoman, who didn’t wish to be named, declined to comment immediately yesterday as the company’s offices were closed for a holiday.

Shares of MCX, which have slumped 66 percent last year, rallied 2.8 percent to 492.25 rupees at the close in Mumbai trading yesterday. Financial Technologies, which plunged 83 percent in 2013, climbed 1.6 percent to 188 rupees.

To contact the reporter on this story: Swansy Afonso in Mumbai at safonso2@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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