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The government on Friday introduced a share swap arrangement for the proposed merger between National Spot Exchange Limited (NSEL) and Financial Technologies (India) Limited.
According to the assessment order, made public on Friday, the government has proposed that three fully paid-up equity shares of Rs 2 each will be given in the new entity in return for every eight shares of Rs 10 each in NSEL.
The share swap will be done only once the central government takes a decision on the merger. A case has already been filed by FTIL at the high court (HC) in Mumbai against the merger. The draft order was made on October 21 last year, to merge NSEL with FTIL in the public interest, under Section 396 of the Companies Act, 1956. This was in the wake of the Rs 5,574 crore payment fraud at NSEL, in which FTIL holds a 99.99 per cent stake.
The government, in its assessment order, has analysed share prices of NSEL and FTIL and came to a fair value of Rs 77 a share and Rs 208 a share, respectively. FTIL is a listed company with a paid-up share capital of Rs 9,21,57,074, divided into 4,60,78,537 equity shares with a face value of Rs 2 each. NSEL has a paid-up share capital of Rs 45 crore, consisting of 45 million shares of Rs 10 each. Of these 45 mn shares in NSEL, the government has proposed to cancel 4,49,99,895 shares now held by FTIL.
Earlier, the government was given a deadline of April 6 by the HC to issue a final order on the merger. However, the government sought three months more to review 19,000-odd objections from FTIL shareholders and related parties before passing an order. The HC had directed the government on February 4 to consider all objections before doing so.
The government has also filed a case before the Company Law Board for removal and supersession of the FTIL board, to allow the government to appoint its own nominees in their place, to “prevent further acts of fraud, misfeasance, breach of trust”.
According to the assessment order, made public on Friday, the government has proposed that three fully paid-up equity shares of Rs 2 each will be given in the new entity in return for every eight shares of Rs 10 each in NSEL.
The share swap will be done only once the central government takes a decision on the merger. A case has already been filed by FTIL at the high court (HC) in Mumbai against the merger. The draft order was made on October 21 last year, to merge NSEL with FTIL in the public interest, under Section 396 of the Companies Act, 1956. This was in the wake of the Rs 5,574 crore payment fraud at NSEL, in which FTIL holds a 99.99 per cent stake.
The government, in its assessment order, has analysed share prices of NSEL and FTIL and came to a fair value of Rs 77 a share and Rs 208 a share, respectively. FTIL is a listed company with a paid-up share capital of Rs 9,21,57,074, divided into 4,60,78,537 equity shares with a face value of Rs 2 each. NSEL has a paid-up share capital of Rs 45 crore, consisting of 45 million shares of Rs 10 each. Of these 45 mn shares in NSEL, the government has proposed to cancel 4,49,99,895 shares now held by FTIL.
Earlier, the government was given a deadline of April 6 by the HC to issue a final order on the merger. However, the government sought three months more to review 19,000-odd objections from FTIL shareholders and related parties before passing an order. The HC had directed the government on February 4 to consider all objections before doing so.
The government has also filed a case before the Company Law Board for removal and supersession of the FTIL board, to allow the government to appoint its own nominees in their place, to “prevent further acts of fraud, misfeasance, breach of trust”.
