FTIL-NSEL merger stayed till March-end

The government last week ordered the merger of NSEL with its cash-rich parent FTIL to enable recovery of investors' money

The Bombay High Court on Tuesday extended the stay to the implementation of the merger between National Spot Exchange (NSEL) and Financial Technologies India (FTIL) till March 31. The court had earlier granted two week’s time for the effectiveness of the final (merger) order from the issue date — February 12, 2016. Earlier, the HC had said if government issued such an order it should not come in force for a fortnight from the date of issue of the order.

Hearing the case, the two-member Bench comprising judges S C Dharmadhikari and G S Patel observed the merger order issued by the corporate affairs ministry was very much in detail and therefore, the petitioner (FTIL) should be given time to file its response after studying the final order. A draft order to this effect was issued by the ministry about a year ago.

The court ordered FTIL to file its submission by March 15, two days before the next date of hearing scheduled on March 17.

As directed by the court earlier, FTIL challenged the ministry’s final order, which allowed the merger of NSEL with its cash-rich parent FTIL for early recovery of investors’ money of around Rs 5,600 crore.

Appearing before the court on behalf of Jignesh Shah, senior counsel Janak Dwarkadas submitted the Centre had passed the final order in the matter on February 12, 2016. In view of the same, the petitioners would need time to consider the order and amend the petition or file a fresh petition, he added.

Senior counsels Virag Tulzapurkar, Ameet Naik and Chirag Kamdar appeared for NSEL and requested the court to grant time till March 31, 2016. Counsel Sandip Parikh, who appeared for NSEL Aggrieved and Recovery Association (NAARA), objected to the same and submitted that FTIL already had two weeks’ time as granted by the order dated February 4 to consider the final order and take appropriate steps.

Dwarkadas submitted that since the passing of the order dated February 4, the corporate affairs ministry has taken several extensions and passed the final order after almost a year. In view of this, it’s only fair to give the petitioners some more time to consider the “very detailed” final order, he pleaded.

After hearing the parties, the court granted FTIL time till March 17, 2016 to study the final order and amend the existing petition or file a fresh one.

Further, it was also ordered that the Chamber Summons for impleading parties are disposed off. Senior Counsel Ravi Kadam appeared for FTIL submitted that the FTIL had taken out a chamber Summons for quashing of the Order dated April 1, 2015 regarding compensation. The same should be kept pending for consideration on the next date.