Sebi will take timely action against erring companies: Sinha

Asserting that "timely action" would be taken against companies violating rules, Sebi Chairman U K Sinha today said the regulator is very alert to ensure protection of investors' interests.

His comments came in response to a query on whether Securities and Exchange Board of India (Sebi) would be initiating action against MCX-SX which rejigged its board yesterday amid continuing payment crisis at its group firm National Spot Exchange Ltd (NSEL).

Without taking names, Sinha said the regulator would act to protect the interest of investors.

"I would like to assure all of you that Sebi is very alert that interests of investors, who are working on the platform of Sebi regulations, is not compromised and is protected.
"Whatever is required for that purpose, Sebi is alert and we are going to act," he said here.

Speaking on the sidelines of an event organised by industry body PHD Chamber, Sinha emphasised the regulator would take "timely action" when there are instances of violating Sebi rules.

When asked about developments at MCX-SX, he said a certain plan of action has been suggested to the exchange when its license was renewed last month. However, he did not disclose specific details.

MCX-SX, promoted by Jignesh Shah-led Financial Technologies, yesterday saw the resignations of its two top executives - Shah himself and Joseph Massey.

Besides Shah, Vice-Chairman and shareholder director of the exchange, the bourse's Managing Director and CEO Massey also put in his papers.

Massey also resigned as shareholder director from MCX-SX CCL (Clearing Corporation Ltd).

Also, MCX-SX announced yesterday that Sebi has nominated former LIC chief Thomas Mathew T as the bourse's Public Interest Director.

"As an interim arrangement, U Venkataraman, whole-time Director, will assist a Special Committee of Public Interest Directors in carrying out the functions of the exchange," it had said.

These high profile exits come at a time when Financial Technologies-promoted NSEL is grappling with nearly Rs 5,600 crore payment crisis due to non-payment of dues to 13,000 investors.

Following the crisis, Financial Technologies and some of its group entities are under the scanner of various authorities including CBI and the Ministry of Corporate Affairs.