According to securities market lawyers, if courts grant interim relief to FTIL, Sebi will have to wait for the outcome of the legal battle as the actions initiated by the capital market regulator are entirely based on the order passed by the Forward Markets Commission (FMC), which FTIL has challenged.
Sebi's actions are based on the order passed by the FMC and any stay or relief by the courts (on the FMC order) would have made the Sebi notice also infructuous, at least temporarily, said a person familiar with the matter. A stay on the FMC order would have been their biggest defence at Sebi. This is the reason why last week the counsels were pressing for early hearing and an interim stay, said the person wishing not to be named.
The High Court heard FTIL's appeal last Thursday and adjourned it to Friday without any interim relief. Senior counsel Janak Dwarkadas, appearing on behalf of FTIL, pressed for urgency highlighting the fact that the company is scheduled to appear before Sebi for hearing on Monday but the bench headed by justice Abhay Oka deferred the matter to February 2.
FTIL requested interim relief from the FMC order dated December 18, which said that the company is not 'fit & proper' to act as an anchor shareholder in any commodity exchange.
Following this, Sebi on December 20 issued a show-cause notice to FTIL, asking why it should not be directed to divest its stake in MCX-SX. Any adverse findings by Sebi would compel FTIL to divest its 5% stake in MCX-SX. FTIL also holds minority stake in the Delhi Stock Exchange and the Vadodara Stock Exchange bourses that fall under Sebi's purview.
Sources, meanwhile, say FTIL and MCX are planning to seek an extension of the January 18 deadline to cut their combined MCX-SX stake.