IL&FS vs La-Fin: HC rejects plea for making MCX a party

La-Fin's attempt to make MCX a party to the buyback default case against IL&FS has suffered a setback with the Bombay High Court observing that it was inclined to dismiss La-Fin's chamber summons. MCX had argued that having offered to make good any losses in the event that IL&FS offloads MCX-SX shares in the open market, should be grounds for MCX to be made a party.

Meanwhile, IL&FS contended that its agreement was solely with Jignesh Shah owned La-Fin.

In August 2009, IL&FS signed a share purchase agreement with La-Fin which provided for la-fin to buyback the MCX-SX shares bought by IL&FS.

IL&FS had bought 4.46 crore shares of MCX-SX.

However, La-Fin had refused to buyback the shares claiming that a buyback would be in breach of Manner of Increasing and Maintaining Public Shareholding in Recognised Exchanges Regulations, 2006 (MIMPS Regulations), which limit promoter shareholding in exchanges to 5 percent.

La-Fin is the promoter behind FTIL and MCX. La-Fin now was two weeks time to appeal against the order. The matter will be heard on September 30.

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