The government has made a draft order to merge National Spot Exchange Ltd (NSEL) with its parent firm Financial Technologies (India) Ltd (FTIL) in ‘public interest’.
The company has received a communication from ministry of corporate affairs on the draft order of amalgamation of NSEL with FTIL under Section 396(1) of the Companies Act, 1956.
The order follows a previous proposal mooted by Forward Markets Commission (FMC) and supported by the finance ministry. It notes that NSEL is not in a position to honour its pending dues to investors and FTIL would need to take responsibility for the same.
The members of the two companies and its creditors may provide suggestions/objections within 60 days, the government order said.
“The company is taking appropriate steps in the matter in consultation with its legal counsel,” FTIL said on Tuesday.
NSEL is promoted by Jignesh Shah-led Financial Technologies (India) Ltd, and is involved in Rs 5,600 crore payment crisis. The proposed move to merge it with FTIL would also transfer the liabilities to FTIL.
Shares of FTIL closed at Rs 169.65 each, down 20 per cent on BSE in a strong Mumbai market on Tuesday.
In May this year, Shah along with Shreekant Javalgekar, former MD and CEO of MCX, were arrested the Economic Offences Wing (EOW) of Mumbai Police, in relation to their alleged involvement in NSEL scam. Last year former NSEL chief executive Anjani Sinha was arrested.
In August, the Bombay High Court granted conditional bail to Shah for over three months.
FTIL is backed by Blackstone and CVCI.
(Edited by Joby Puthuparampil Johnson)