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Madras HC stays CLB's order which prevented FTIL from selling assets

MCA filed a petition at CLB seeking removal of the FTIL Board

T E Narasimhan  |  Chennai 

The high court here suspended a Company Law Board (CLB) order which stopped Financial Technologies (India) Ltd from selling its assets. The company had petitioned against the June 30 order of CLB, passed while the latter was hearing a petition from the ministry of corporate affairs (MCA) for supersession of FTIL’s board of directors.

An FTIL spokesperson said the court had, excepting immovable assets, suspended the CLB order. “With this, the company can carry out its day-to-day operation/ activities seamlessly,” the spokesperson said. MCA had justified its move after deciding the FTIL board was responsible for the payments scam at National Spot Exchange (NSEL). However, FTIL argued this was a new board having taken charge in November 2014, after the scam was disclosed.

The company in an earlier statement said “The only material act of the new board since they have joined is its resolve to oppose the draft order and the proposed forced amalgamation by MCA (of NSEL with it). As such, MCA pleads (unjustifiably), that a bona fide objection or challenge to its proposed actions amounts to mismanagement on the part of the board. Such allegation on the part of MCA seems mala fide and deserve to be challenged and opposed.” FTIL was promoter of NSEL.

Earlier, the Mumbai Police had tried to stop FTIL from stake sale in India Energy Exchange (IEX) to a consortium of buyers. The company approached the high court there and got a reprieve. FTIL then signed second IEX share purchase agreement with a group of high value buyers for offloading its 16.6 per cent stake. The Central Electricity Regulatory Commission (CERC) directed FTIL to transfer its shares in IEX to a trust. FTIL approached the Supreme Court, which struck down the CERC order.

FTIL’s stock price rose 2.7 per cent to Rs 154.75 a share on Friday at the BSE.

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First Published: Sat, July 11 2015. 00:18 IST