The National Stock Exchange (NSE) picked up a 26% stake in Omnesys Technologies Pvt. Ltd nearly six months ago, according to a report in Business Standard newspaper. Besides, its deputy managing director has a seat on the board of the Bangalore-based technology vendor.
NSE isn’t a listed company, and so isn’t required to disclose all information to the public. But, considering that another technology vendor, Financial Technologies (India) Ltd, has filed a lawsuit against NSE for being unfair, the exchange’s silence about the matter raises questions.
Financial Technologies, which provides front-end trading technology to brokers, has claimed NSE hasn’t given it access to feeds of its currency futures segment without providing suitable reasons. It says NSE’s decision was arbitrary. Meanwhile, other technology firms including Omnesys have been given access to the feeds.
Now, with the disclosure that NSE has significant interest in a rival firm, one theory goes that NSE wanted Omnesys to gain at Financial Technologies’ expense. This is the reason, such critics say, NSE didn’t give it permission to provide currency futures trading on its platforms.
We don’t subscribe to or reject such theories, but find it alarming that NSE continues to be silent on these matters. Various attempts by Mint reporters to get NSE’s comments have been futile. Shrikant Pandit, chief executive of Omnesys, says his company has an agreement with NSE to not talk about the deal.
This also raises questions about corporate governance. Being a stock exchange, NSE not only provides a platform for transparent price discovery but also acts as a quasi-regulator in ensuring that listed companies stick to listing guidelines including norms on corporate governance. Given these responsibilities, it should be above board in issues relating to corporate governance.
It may well be that NSE has a fair explanation for all this, but by keeping quiet, it’s just causing more questions to be raised.
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