FTIL moves Supreme Court against NSEL merger order
The special leave petition in the apex court against the Bombay HC order which allowed the government to force the merger of NSEL with FTIL will come up for admission on 16 February
Mumbai: Financial Technologies India Ltd (FTIL), now known as 63 Moons Technologies, has moved the Supreme Court against the Bombay high court’s order which allowed the government to force the merger of National Spot Exchange Ltd (NSEL) with FTIL.
The special leave petition (SLP) in the apex court will come up for admission on 16 February.
“Our chairman Mr Venkat Chary had said earlier that we will be moving the Supreme Court before the expiry of the 12-week stay period granted by the Bombay high court on the merger order. Accordingly, we have moved the Supreme Court and filed the SLP. We have full faith in the judiciary and continue to believe that the truth and justice shall prevail,” said a spokesperson for FTIL in an emailed response.
The 12 week stay expires this week.
The Bombay high court on 4 December had upheld an order of ministry of corporate affairs (MCA) to merge the scam ridden NSEL with its parent company, FTIL.
Justice M.S. Sonak in his order in favour of the MCA directive held that it was not a forced amalgamation between two unrelated entities but of a wholly owned subsidiary with its parent in public interest. The order said it was an extraordinary case of a collapse of “a commodity stock exchange” and the government deemed fit to pass the merger order in public interest.
The ministry of corporate affairs on 12 February 2016 had ordered a merger of FTIL and NSEL, making the parent responsible for the liabilities of its fraud-hit subsidiary. It will be the first time any two private entities in India are merged by fiat, using a provision of the Companies Act that allows the government do so in public interest.
Controlled by entrepreneur Jignesh Shah, FTIL owns 99.99% of NSEL. Trading on NSEL was suspended in July 2013 after a Rs5,574.35 crore payments issue surfaced.
A Supreme Court verdict in favour of the government for the merger would essentially mean that FTIL may have to shoulder NSEL’s current outstanding liabilities worth Rs5,269 crore.
Editor's Picks »
- Motherson Sumi continues to face margin pressure in foreign markets
- What the Warren Buffett indicator tells us about market valuations today
- Jet Airways lands with a thud in Q4 as fuel costs increase
- IBC amendments: Some dilutions, and a lot more speed
- Patanjali’s gambit is paying off in toothpaste wars