Millennium Post

Crisis-ridden MCX’s new CEO gets over Rs 3 crore salary

While the bourse, the first and the only listed one in India, sees its profits plummet to a record low level since listing, Vaish has been appointed with a gross pay package of about Rs 3.25 crore, according to exchange documents.

This amount is more than double the remuneration paid to his predecessor Shreekant Javalgekar at Rs 1.4 crore for 2012-13, as mentioned in the exchange's latest annual report.

Vaish has been appointed Managing Director and CEO of MCX for a period of three years with effect from 1 February, 2014, pursuant to a regulatory driven process to restructure the board and top management structure of the exchange.

Javalgekar was appointed as MD and CEO for three years effective 1 July, 2012, but his tenure was cut short after a major payment crisis erupted at National Spot Exchange Ltd (NSEL), which was also founded by the same promoters, in August last year.

Consequently, all nominees of erstwhile promoter FTIL group, including Javalgekar and the group chairman Jignesh Shah, resigned from the board of MCX, while the commodity market regulator FMC declared in December last year that FTIL was no more a 'fit and proper' entity to hold 2 per cent or more stake in the exchange.

Recently, MCX board had also decided that FTIL's voting rights would be capped at two per cent stake despite it continuing to hold 26 per cent stake. The exchange's original promoters have challenged this decision.

While MCX trading volumes have begun to pick up after some weakness in the aftermath of NSEL crisis, the exchange last week reported a 71 per cent plunge in its third quarter net profit to Rs 21.84 crore for the three-month period ended 31 December, 2013.

This is the lowest quarterly profit for the exchange ever since it got listed in the market in March, 2012 and began making public its financial results.

While announcing results, Vaish said that his focus would be on nurturing the exchanges's strengths and transform it into a ‘professional and compliance-driven’ organisation. Before Joining MCX, Vaish had served at BSE, NSDL, Deutsche Bank and ANZ Grindlays Bank.

According to his terms of appointment, Vaish would get a salary of Rs 2.3 crore per annum with an annual increment of Rs 10 lakh every year, plus an annual variable bonus of up to 30 per cent, allotment of 10,000 ESOPs (convertible into an equal number of MCX shares) per annum, and other benefits. MCX can terminate the appointment of Vaish with prior approval of FMC by giving him three-month notice or payment of an equivalent salary amount. However, in case of any regulatory direction for his removal, no notice pay would be payable.

While MCX has already seen its board being recast in the aftermath of NSEL crisis, the exchange is also seeing many changes in its senior executive ranks ever since Vaish's entry as he is said to be building his own team, sources said.

HC to hear fresh PIL against NSEL and Jignesh Shah today

The Bombay High Court will on Sunday hear a fresh PIL seeking transfer of a probe by Mumbai police into the alleged Rs 5,500-crore scam involving National Spot Exchange Ltd (NSEL) and Jignesh Shah, to CBI.

The PIL filed by activist Ketan Tirodkar argues that since the scam has national and international ramifications, only CBI has the necessary jurisdiction to probe this matter. The NSEL case pertains to alleged financial embezzlements by the Multi-Commodity Exchange (MCX) and the Financial Technologies India Ltd (FTIL)— both promoted by Shah. The Economic Offences Wing (EOW) of Mumbai Police is currently probing the case.

The petition alleged those arrested so far like Nilesh Patel, a major borrower, and three employees of NSEL, including Anjani Sinha, were mere pawns in the game while concerted efforts were made to project Shah, the alleged mastermind in the fraud as a ‘victim’.

‘This attempt to project the mastermind of the scam as a victim of conspiracy by his employees and borrowers is an outcome of the pressure of vested interests in the corridors of power who have been benefitted by the NSEL-MCX-FTIL triangular operations’, according to the PIL.
Next Story
Share it