FTIL-NSEL merger: 96% objections 'orchestrated', says MCA

Ministry received 50,389 representations, physical papers and emails, regarding proposed NSEL-FTIL merger during March-Oct 2015

As a face-off continues between Jignesh Shah-led FTIL and Corporate Affairs Ministry over NSEL merger, the government in its final order has said that over 96% of the objections received on the proposed amalgamation prima-facie were "orchestrated and concerted".

In a first-ever move forcing the amalgamation of two private companies, the MCA has ordered the merger of crisis-hit National Spot Exchange Ltd (NSEL) with its parent Financial Technologies (India) Ltd (FTIL) in "public interest".

A total of 50,389 representations, through physical papers and emails, were received by the Ministry with respect to the proposed merger of NSEL with FTIL during March-October 2015, according to the final order.

They were submitted in response to a public notice issued by the Ministry seeking comments from entities concerned.

"It is observed that over 96% of the objections are from shareholders of FTIL (48,422 out of the total 50,389 records). It is reiterated that the language and manner of emails and representations purportedly from the shareholders are almost ditto and from the email id and seemingly created by FTIL.

"The emails were sent in bulk and thus the email box was dumped resulting into bouncing back of a few emails. Later, the physical copies were received and considered. Prima-facie, these objections were orchestrated and concerted," the 47-page final order said.

As per the final order, 1,203 objections were from the FTIL employees. They too were repeating the same objections in similar language. Prima facie, these objections were orchestrated and concerted, it added.

Once implemented, the final order, which confirms the Ministry's ruling in October 2014, would amalgamate the two entities into one and all the assets and liabilities of NSEL are transferred to FTIL.

FTIL has termed the final order as "highly disappointing" and would challenge it.

The Rs 5,574 crore payment crisis at NSEL, part of the FTIL group, came to light in late 2013. Since then, the matter has come under the scanner of multiple regulatory as well as investigation agencies.

As per the Economic Offences Wing, Mumbai, the total amount recoverable from 24 defaulters is Rs 5,689.95 crore while injunctions against assets of defaulters worth Rs 4,400.10 crore have been obtained, the order, issued on February 12, said.

Among others, "assets worth Rs 5,444.31 crore belonging to the defaulters have been attached," by the Economic Offences Wing.