No protection to FTIL from HC now, matter to be heard tomorrow

Jignesh Shah promoted-Financial Technologies India Ltd today urged the Bombay High Court to grant temporary protection from the order of Forward Market Commission (FMC) seeking reduction of its shareholding in Multi-Commodity Exchange from 26 to 2 per cent.
However, a bench headed by Chief Justice Mohit Shah did not grant status quo on the shareholding pattern but decided to hear the matter tomorrow while clubbing all PILs filed by the investors in the Rs 5,500 crore scam involving National Spot Exchange Ltd, founded by Shah.
FTIL and its promoter have filed a petition in the High Court challenging the recent FMC order which ruled that both were not fit to run any stock exchange in the country and asked for reducing its shareholding in MCX to 2 per cent.

Petitioner's counsel Janak Dwarkadas assured the court today that FTIL will not block any board resolution so long as MCX makes a statement that it will not change its capital structure.
He said as an MCX investor, FTIL had a right to oppose such a resolution on reduction of shareholding pattern of the multi-commodity exchange but it was ready to forgo this right till the matter is heard and decided by the court.
Dwarkadas argued that currently FTIL did not have a single director on the board of MCX as all the three directors had resigned before the FMC passed the impugned order.

He also said that the 26 per cent shareholding of FTIL in MCX would not cause any prejudice to shareholders. Criminal cases filed against NSEL were pending and probe was in progress. In the midst of these developments, such an order passed by FMC was not proper, he said.

FTIL argued that it was being targeted by FMC, though investigating agencies has not held them guilty so far.
FMC counsel Iqbal Chhagla said, "We are not holding them guilty, we are just saying that they are not fit to run any stock exchange. It cannot be argued by them (FTIL) that Shah was not aware of what was going on (in the scam-tainted organisation)."

"To say that FTIL knows nothing of what was happening in its subsidiary company would not be correct," he said.