MCX-SX suffered a major loss of investor consequence due to the scandal at NSEL.

It is India's youngest stock exchange and was a platform that Jignesh Shah, the engineer turned entrepreneur, fought long and hard to establish. It took time and he battled like a man possessed to the point when the company was finally notified as a "recognized stock exchange" under Section 2(39) of the Companies Act on 21 December 2012.

Less than a year later, Shah has lost control over the exchange and will never be able to make it back.

To add to his woes, the new Board of MCX-SX will soon review the close ties that exist between the parent firm-Financial Technologies (India) Ltd (FTIL)-and the exchange.

Shah had to step down as the chairman and that place was taken former home secretary Gopal K Pillai, a vastly experienced administrator with long stints in crucial government departments including that of commerce. Pillai, along with other public interest directors appointed by the Securities and Exchange Board of India (Sebi) are now steering the loss making exchange. A new chief executive officer has been selected and his announcement awaits clearance from the stock market regulator.

Pillai told CNBC-TV18 that Shah will never be able to come back to the stock exchange. "The former promoters are now out of MCX-SX. Shah is a minority shareholder and the stock exchange is now looking at being arms length from Shah," he said. MCX-SX suffered a major loss of investor consequence due to the scandal at NSEL. With nearly two dozen investors including banks and financial institutions, it is clear that the stakeholders will seek a greater say. Pillai says the institutions will get a place on the Board as shareholder directors. There is also the possibility of inducting a strategic investor in the future.

So, while he has lost his place at the stock exchange, Shah will have to contend with several other consequences of the exchange slipping out his grasp. The key among these is the review of the business relationship that exists between FTIL and the stock exchange. Pillai said the Board is looking at the business pacts in great detail and would review them at its next meeting sometime mid-December. "Certain provisions in the contracts favour FTIL. For instance, the cancellation clauses one-sided," he said, adding that he was sure that FTIL would be willing renegotiate the clauses. This process is likely to be initiated in the new year and be over by March 2014.