Power sector regulator CERC has asked Financial Technologies to transfer its entire stake in India Energy Exchange (IEX) to a trust demat account of the bourse by July 2 and fully exit the exchange by July 20.
Financial Technologies India Ltd (FTIL), which holds around 26 per cent stake in IEX, is divesting its stake in the bourse following a direction from the Central Electricity Regulatory Commission (CERC) in May last year in the wake of the Rs 5,600-crore payment crisis at the group firm NSEL.
CERC had set June 18 as the deadline for FTIL to sell stake, but FTIL overshot it, following which the regulator in the order last week gave further extension to the company, but with certain riders.
CERC said: “FTIL is directed to transfer its entire shareholding in the Trust Demat Account of IEX by July 2, 2015. If the direction is not complied with, HDFC Bank Depository Service is directed to transfer the shares of FTIL in IEX into the Trust Demat Account of IEX by July 3.”
CERC, however, added that transfer of shares from the Trust Demat Account of IEX to the account(s) of the purchaser(s) can be done only with its prior approval.
As per the order, FTIL has been directed to complete the sale of its entire stake in IEX by July 20, failing which the latter will take steps to sell the shares by August 5.
An FTIL spokesperson said this would “adversely affect FTIL and the interests of its 63,000 shareholders, particularly when the very authority of CERC to issue such directions is under challenge before the Supreme Court.”
FTIL has already signed a share purchase agreement to offload 16.6 per cent in IEX, which was known to CERC at the time of passing the order, he claimed.
“The ability of FTIL to derive the best commercial terms would be seriously jeopardised in the event FTILu2019s shares in IEX are forcefully transferred as directed by CERC,” he said, adding that the company is considering all possible legal options.
On June 19, FTIL had said it entered into a new share purchase agreement with four companies to sell 16.6 per cent in IEX for Rs 357.06 crore.
The earlier agreement which was signed on November 5, 2014, was terminated and the company had decided to close the new agreement within 60 days.
IEX is the country’s leading power exchange with more than 95 per cent market share.