HIgh court declines to give relief to FTIL in stake sale directive

The Bombay High Court today declined to stay the directives issued by the Forward Market's Commission relating to stake sale of shareholder who has been declared not fit and proper. Financial Technologies had challenged the norms issued by the FMC regarding ownership of exchanges which has mandated the exchange to extinguished voting rights and put on abeyance corporate benefits for shares of not fit shareholder in the commodity exchange.

FMC had said if such a shareholder failed to sale its stake in the exchange in that case exchange can dispose of the shares. For FTIL, since it was declared not fit and proper in last December following NSEL crisis MCX has proposed to amend its article of association to gain powers to dispose of the shares of FTIL. The company even challenged the move by MCX in the Mumbai high court but the court also did not grant stay on that. FTIL wanted that the ballot voting for the change in article of association should allow it to vote and without which the result of the ballot should not be disclosed. High court declined this plea.

Justice Vazifdar today said while hearing the case said that, "We must proceed on the basis that the (FMC's )order is still valid. The shareholding ought to have been brought down to below 2%."

The voting rights of Financial Technologies have already been frozen by Multi Commodity Exchange and the ballot posting voting resolution to amend it''s article of association to sale FTIL 26% shares and to transfer that to an escrow account for that purpose.

The High Court also did not put a stay on the postal ballet voting passing a resolution to the amendment of the article of association to transfer FTIL's stake in MCX to the escrow account. The results of the postal ballot is set to be declared on 18 June. The postal ballet voting will end today at 6:30 PM.

FTIL is in the process of divesting it's stake in MCX as it was declared not fit and proper by FMC on 17 December after the break out of the Rs 5,600 crore SEL scam. However so far it has not received any binding application for buying stake.

FTIl's stock today on The Bombay Stock Exchange was down by 4.7% to Rs 260 per share and MCX stock was down by 2.7% to Rs 563.90 per share.