Financial Technologies (India) rose 16.14% to Rs 207.55 at 14:02 IST on BSE after the company said its board unanimously decided to oppose the Ministry of Corporate Affair's petition to the Company Law Board seeking removal of the company's board.
The announcement was made on Sunday, 1 March 2015.
Meanwhile, the BSE Sensex was down 1.29 points, or 0.00%, to 29,360.21.
On BSE, so far 12.72 lakh shares were traded in the counter, compared with an average volume of 1.91 lakh shares in the past one quarter.
The stock hit a high of Rs 210.80 and a low of Rs 178.25 so far during the day. The stock hit a 52-week high of Rs 403.60 on 10 March 2014. The stock hit a 52-week low of Rs 135.75 on 22 October 2014.
The stock had underperformed the market over the past one month till 28 February 2015, falling 8.73% compared with 0.67% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 2.46% as against Sensex's 2.33% rise.
The small-cap company has an equity capital of Rs 9.22 crore. Face value per share is Rs 2.
The board of Financial Technologies (India) (FTIL), which met on Sunday, 1 March 2015, passed the resolution to strongly oppose the Ministry of Corporate Affair's (MCA) petition to Company Law Board (CLB) seeking removal and supersession of the FTIL board. The board has further termed the same as a clear attempt by the MCA to render ineffective and in fact, defeat FTIL's challenge and opposition to the proposed amalgamation of National Spot Exchange (NSEL) with FTIL, the company said in a statement.
In this respect, also to be noted that 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. 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 allegations on the part of MCA seem to be mala fide and deserve to be challenged and opposed, FTIL said.
"After deliberating on the matter and also considering that the issue is totally prejudice, mala-fide and not in the interest of FTIL its board, its employees, its shareholders and other stake holders, we have decided to contest all issues raised by Union Of India vigorously as per the law of the land," Venkat Chary, Acting Chairman, FTIL said. He further added that as the board is competent enough to deal with current situation, the company will file a petition before the Bombay High Court or the Company Law Board or at any other appropriate forum as it deems fit.
The board also resolved that, since four legal suits are sub judice - including representative suit, fit and proper and writ petition filed opposing amalgamation of NSEL with FTIL - the petition by MCA is inequitable to seek replacement of the entire board. Also it is seen as an attempt to prevent FTIL from contesting writ petition challenging the amalgamation, representative suit for lifting of corporate veil and the Not Fit and Proper order, the company added.
The board strongly believes that it has acted prudently in the larger interest of over 53,000 shareholders. The board has also strongly rebutted the allegations that have been levelled in the MCA's petition, the company said.
FTIL owns 99.99% in NSEL, which is engulfed in a Rs 5574.35 crore payment crisis. The crisis at NSEL came to light on 31 July 2013 when the exchange suspended trading in all but its e-series contracts. These, too, were suspended a week later. The suspension may have been prompted by an instruction from the ministry of consumer affairs to the exchange asking it not to offer futures contracts. A spot exchange is not supposed to do so, but NSEL was doing that. NSEL tried to implement the change, but because its appeal was to investors and members who were not interested in spot trades, it eventually had to suspend all trading.
In December 2013, the commodities market regulator Forward Markets Commission (FMC) ruled that FTIL is unfit to hold a stake in any exchange. Thereafter in October 2014, the government issued a draft order suggesting that FTIL be merged with NSEL in public interest. The merger would mean FTIL would assume all the liabilities of the commodities exchange and become party to all the contracts and agreements entered into by NSEL. The government has said the order would be finalized after it considers feedback from stakeholders and the public. On 24 February 2015, FTIL asked all its shareholders to oppose the merger.
FTIL reported a net loss of Rs 4.86 crore in Q3 December 2014 compared with net profit of Rs 34.48 crore in Q3 December 2013. Net sales fell 55.9% to Rs 35.29 crore in Q3 December 2014 over Q3 December 2013.
FTIL is among the global leaders in offering technology IP (Intellectual Property) and domain expertise to create and trade on next generation financial markets. It is a global leader in creating and operating next-generation tech centric financial exchanges.
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