The Ahmedabad High Court on Thursday put a stay on a part of the order issued by the Forward Markets Commission (FMC) on Kailash Gupta, the promoter of Neptune Overseas Ltd (NOL). NOL owns an anchor investor’s stake in India’s third-largest commodity futures exchange, the National Multi Commodity Exchange (NMCE).
FMC, in its July 23 order, had held Gupta guilty of abusing his executive fiduciary position as the managing director and, later, as the executive vice-chairman of NMCE for causing wrongful and illegal monetary benefit to companies controlled by him or his relatives at the expense of the exchange. The regulator declared him “not fit and proper” to hold any position in the management and the board.
It was further ordered that NOL shall bring down its holding in NMCE to two per cent or less within three months, extendible by a maximum of another three months by FMC at its discretion.
Gupta had challenged this order in the Ahmedabad High Court. On Thursday, the Court observed the short span of three months to bring down the promoter’s equity was inadequate and, therefore, had been stayed.
Happy with the order, Gupta said: “The FMC order was harsh. I had faith in the Indian judiciary which has brought relief.”
A senior FMC official, however, warned there was nothing to cheer about in this order. The regulator had already kept this window open. The rest of the FMC order was kept intact and Gupta was directed by the court to vacate NMCE premise, he added.
