MCX-SX moves the Bombay HC against SEBIs decision JSA represents bourse

In an entirely expected move, MCX Stock Exchange Limited (MCX) has moved the Bombay High Court against the decision of the Securities and Exchange Board of India (SEBI) to reject the bourse’s application for trading in segments like equities and equity derivatives..In an entirely expected move, MCX Stock Exchange Limited (MCX) has moved the Bombay High Court against the decision of the Securities and Exchange Board of India (SEBI) to reject the bourse’s application for trading in segments like equities and equity derivatives..In September this year SEBI had rejected the application citing reasons of failure on part of MCX for not fully complying with the Manner of Increasing and Maintaining Public Shareholding in Recognized Stock Exchanges Regulations (MIMPS Regulations). In a 68 page order, whole time member, K.M. Abraham while rejecting MCX’s plea also said that the concentration of economic interest in a recognized stock exchange in the hands of two promoters [founders] is not in the interest of a well-regulated securities market..MCX which filed its petition at the HC on October 29, 2010 has once again appointed J. Sagar Associates (JSA) to represent them. In its application before the SEBI, the bourse had been represented by JSA with a team led by Senior Partner, Nitin Potdar and Senior Counsel, J.J. Bhat..SEBI’s verdict in September had yet again acted as a stumbling block in MCX’s ambitions. It filed its application way back in April 2010 for recognition. When no reply was forthcoming from the market regulator for months, MCX filed a petition before the Bombay High Court in July 2010 regarding the losses caused to it due to SEBI’s non-decisive nature. The Court then ordered SEBI to decide the fate of the application before September 30, 2010..CNBC-TV18 reports that MCX feels that the SEBI order is vindictive, biased and discriminatory. MCX-SX has also said in its statement that the SEBI order has adversely affected its business. While rejecting MCX’s application SEBI had also said that its buyback agreements with other shareholders like Punjab National Bank, IL & FS and IFCI were illegal. In response to this statement MCX has maintained that it was the SEBI officials themselves who had suggested the scheme of capital reduction to them and there was no objection from SEBI to the scheme of capital reduction till the order was passed by SEBI on September 23, 2010..The HC which is currently closed due to vacations will reopen on November 14, 2010 and is expected to take up the case soon thereafter, which is bound to captivate the interest of the financial market..Reference No. WPL/2519/2010