On the day Financial Technologies (FTIL) was holding its annual general meeting (AGM), the Bombay High Court restrained the company from distributing a dividend to its shareholders or to pay higher remuneration to key personnel, pending the hearing of a notice moved by investors. The matter will now come up for hearing on October 5.
Three corporate investors, which lost their money invested in the contracts of FTIL arm, National Spot Exchange (NSEL), had peitioned. They alleged the FTIL promoters, led by Jignesh Shah and related entities such as La Fin, were attempting to circumvent the attachment orders of the Mumbai Police's economic offences wing, by getting dividend payments made in bank accounts not covered by these orders.
The court's order came before the AGM, scheduled at 4 pm, at which FTIL proposed to seek approval for its proposal to pay final dividend of Rs 5 a share. Promoter entities, including Shah, have 21 mn shares in the exchange.
The company also proposed to reimburse the remuneration payable to Shah’s brother, Manjay Shah, and FTIL co-founder Dewang Neralla, as heads of subsidiaries Atom Technologies and Ticker Plant. It also proposed to pay Shah's long-term associate and independent director, Miten Mehta, Rs 1 crore for “professional services”.
“Since the parties are unable to agree upon a workable order, by consent of the parties, the notice of motion is taken up for hearing and final disposal, and the hearing has commenced,” the court said.
When asked, an FTIL spokesperson did not offer a comment. NSEL investors have argued in various forums that pending the final order in the proposed merger of FTIL and NSEL, under process at the ministry of corporate affairs, the assets of FTIL could not be alienated.