The Financial Technologies India Ltd (FTIL) has filed a petition in the Bombay High Court challenging the recent government order to merge its crippled National Spot Exchange with itself.
FTIL has questioned the impugned order issued by the Corporate Affairs Ministry on October 21 for proposed “forced” amalgamation of the now shut National Spot Exchange Ltd (NSEL) with the company.
The company will take further steps as per advise of the legal counsel/lawyer, FTIL said in a communique to the BSE today.
The government had last month ordered the merger of the bourse with its parent firm, FTIL, in order to ensure faster recovery of dues for entities hit by the Rs 5600 crore fraud at NSEL.
FTIL owns 99.99 percent of NSEL, on which trading was suspended after the fraud came to light in July 2013.
Earlier, some minority shareholders of FTIL have raised objections to the proposed merger of the scam-hit NSEL with the company.
The payment crisis at NSEL came to light in July 2013 and the decision to merge it with FTIL has been taken as the bourse is not left with any viable, sustainable business while FTIL has necessary resources to facilitate speedy recovery of dues, according to official sources.
The proposal of merger would take a final shape after taking into account submissions or objections made by the shareholders and creditors of the two companies. Comments have been sought from them till December 20.
NSEL’s entire business, properties and liabilities, among others, would be transferred to FTIL after the merger, according to the order issued on October 21.
The ministry had said that FTIL cannot be allowed to confine its responsibility and concern only for the small investors alone and it has to shoulder full responsibility for the outstanding dues at NSEL.
FTIL has prayed in the petition that the Government order was bad in law and needs to be quashed.