BackFTIL moves SC against FMC order
The plea was filed in the SC as the Bombay HC, in November 2014, refused to grant an interim stay on the FMC order
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Mumbai: Financial Technologies (India) Ltd (FTIL) has filed an appeal in the Supreme Court against a 17 December 2013 order of the Forward Markets Commission (FMC) that declared FTIL unfit to run exchanges.
A spokesperson for FTIL confirmed the development and said the appeal has been admitted in the Supreme Court. The plea was filed in the Supreme Court as the Bombay high court, in November 2014, refused to grant an interim stay on the FMC order, added the spokesperson.
“The special leave petition filed in the Supreme Court by FTIL, challenging the ‘fit and proper’ order by Forward Markets Commission (FMC), was listed for 30 January, which got adjourned to 6 February," the spokesperson said in an email.
The FMC’s order had come in the wake of a ₹ 5,574.34 crore payment scandal at the National Spot Exchange Ltd (NSEL). FTIL holds a 99.9% stake in NSEL.
According to FTIL, FMC’s order has become the foundation for subsequent regulatory orders and forced divestment by FTIL in its exchange ventures. FTIL has claimed it lost ₹ 1,000 crore due to “forced divestments" as a result of the order. The court’s refusal to grant an interim stay also means the government can proceed with its proposal to merge NSEL with FTIL.
FTIL has also filed a writ petition in the Bombay high court, challenging the issuance of the draft order by the government proposing a forced merger of the firm with NSEL. The high court has granted an interim stay on the draft merger order.
In its December order, FMC said FTIL and Jignesh Shah, the then chairman of FTIL, were unfit to run an exchange and barred Shah from holding a management position in any recognized exchange in India. FTIL, which held 26% stake in the Multi Commodity Exchange of India Ltd (MCX), sold its entire holding following FMC’s order. It sold a 15% stake in MCX for ₹ 459 crore to Kotak Mahindra Bank Ltd and the remaining 11% in the open market.
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