Commodities

FTIL makes last-ditch effort to avoid NSEL merger

| | Updated on: Oct 13, 2015

Top officials raise objections before Ministry panel

Firmly opposing any ‘forced’ merger of crisis-hit NSEL with Financial Technologies (India) Ltd (FTIL), the top brass of the latter on Tuesday presented before a Corporate Affairs Ministry panel its objections to the draft merger order issued in October last year.

At the oral hearing that lasted for over an hour, FTIL officials and legal team said that the proposed ‘forced’ merger should not be pursued, as it would destroy the concept of limited liability, thereby affecting investor sentiment.

Also, the ‘forced’ merger could turn out to be a bad precedent and open doors for similar action against holding companies whose subsidiary is facing an unproven liability.

FTIL officials are understood to have also laid the blame at the door of the Forward Markets Commission (FMC) for not taking action against 24 defaulters who had taken responsibility to pay the admitted liability in a phased manner.

Their contention was that the ₹5,600-crore National Spot Exchange Ltd (NSEL) crisis could have been solved, but enough efforts were not forthcoming from FMC to actually find a solution.

Today’s hearing by the Ministry-appointed committee (comprising mainly joint secretaries) came in response to the directive of the Bombay High Court, which had asked the Ministry to pass the final order by the end of this month.

The panel will give an oral hearing to NSEL on Wednesday and hear objections, if any, on the draft merger.

FTIL officials also conveyed to the panel that most FTIL shareholders (99.55 per cent) had opposed the proposed merger. Also most of the creditors, besides all the employees, had voted against the merger along with the board of directors, it was submitted.

Published on January 22, 2018

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