FTIL case: Govt examining NCLT order to decide next course of action

The government said today that it is still examining the NCLT ruling in the Financial Technologies case wherein the corporate affairs ministry has been permitted to appoint up to three nominee directors on the company's board.

The ruling pertained to a petition filed by the ministry seeking relief on various counts against the backdrop of the Rs 5,600-crore payment crisis at the National Spot Exchange Ltd (NSEL).

The National Company Law Tribunal (NCLT) last week said the government can nominate up to three directors to the board of Financial Technologies (India) Ltd (FTIL) -- which is now known as 63 Moons Technologies -- to take care of the interest of all stakeholders as well as protect the company's investments in its subsidiaries.

"NCLT has upheld the government's position of having three nominee directors on the board of FTIL as regards other aspects of the order. We are still examining the order to decide next course of action," Minister of State for Corporate Affairs P P Chaudhary told PTI in an interview.

The tribunal has also barred Jignesh Shah and nine others from holding directorship in FTIL (63 Moons) as well as any other company.

Shah, the founder of 63 Moons, is among those alleged to have been involved in the NSEL scam.

In an order, dated June 4, an NCLT Chennai bench said Shah and nine others are "not fit and proper persons" to hold the office as director or any other office connected with the conduct and management of FTIL and NSEL.

It also said they are "not eligible for appointment as directors in any other company".

Responding to the order, 63 Moons in a statement on June 9 said that in respect of past directors and new directors' addition, it was "still analysing the order... on a quick review, it appears to be full of factual inaccuracies and inherent contradictions".

"We are extremely happy to note that NCLT has rejected Ministry of Corporate Affairs' prayer to supersede the board of 63 moons in connection with the payment defaults that occurred at one of our subsidiaries, NSEL in 2013.

"The order has also given a clean chit to the current board of 63 moons of any alleged misconduct or wrongdoing against the interest of its shareholders," 63 Moons MD and CEO S Rajendran had said in the statement.

Following the NSEL scam, the ministry had sought merger of FTIL and NSEL. A plea challenging the order was rejected by the Bombay High Court and the Court's ruling has been challenged before the Supreme Court.