NCLAT disallows removal of 63Moons board

Our Bureau Mumbai | Updated on March 12, 2020

The NCLAT has disallowed the government from superseding the board of 63 Moons Technologies that was caught up in the Rs 5,500-crore NSEL payment crisis. But it has upheld the Chennai NCLT’s order of Section 388B against three personnel, Jignesh Shah, Dewag Nerala and Manjay Shah, which pertains to 'fit and proper.'

63 Moons Technologies was formally known as Financial Technologies and was the promoter of now-defunct NSEL. In June 2018, the NCLT barred Jignesh Shah and nine others from holding directorship in 63 Moons Technologies as well as any other company. The NCLT also allowed the government to nominate three directors on the board of 63 Moons.

S. Rajendran, MD & CEO, 63 Moons said, “The order has given a clean chit to the current board of 63 Moons, absolving it of any alleged misconduct or wrongdoing against the interest of its shareholders. Strangely, in the case of Jignesh Shah, Section 388B was applied on the basis of material beyond the original petition filed by MCA in 2015. Of the three directors of 63 moons, only Jignesh Shah was on the NSEL board (as non-executive director) and proceedings under Section 397 have not been initiated against NSEL nor have proceedings under Section 388B been upheld against any other directors of NSEL, including other directors of 63 Moons, who were also on the NSEL board. This complete contradiction is one of the many unexplained and unsubstantiated inconsistencies in the order. We are examining the operational part of the judgement.”

The proposal to supersede the board was made by the Ministry Of Corporate Affairs (MCA), which was rejected by NCLAT on Thursday. 63 moons has 14 directors, including four former IAS Secretaries, one former Supreme Court judge, and one former High Court judge.

Published on March 12, 2020

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