Financial Technologies has asked its shareholders to oppose the proposed "forced" merger of scam-hit National Spot Exchange Ltd (NSEL) with itself. In October last year, the Ministry of Corporate Affairs had ordered merger of the NSEL with Financial Technologies (India) Ltd. The move was aimed in ensuring faster recovery of dues for entities hit by the Rs 5,600-crore fraud at NSEL.
"We request you as a responsible owner of your company to send to the Ministry of Corporate Affairs, your genuine, bonafide and reasoned objections to the draft order," FTIL board chairman Venkat Chary said in a letter to shareholders.
Chary, who is also the Independent, Non-Executive Director, said the company is pursuing every legal means available to ensure that the rights of more than 63,000 shareholders are protected.
"You (shareholders) too are entitled to object to the forced amalgamation of NSEL with your company by exercising your right of opposition...," he said. Even though FTIL has challenged the Ministry's draft merger order, the Bombay High Court has ruled that the Ministry can pass its final order and then the company can challenge the same.
According to the letter, FTIL has Rs 2,000 crore cash and a debt of Rs 475 crore after it was forced to sell its stake in MCX, MCX-SX and SMX, among others.
"Assets like BFX, Bourse Africa, DGCX and Atom will add further to FTIL's cash reserves. These cash reserves of FTIL belong to you and only you, the 63,000+ shareholders of FTIL, as your legal right," it noted.
"What we fail to understand is why the MCA is in such a tearing hurry to forcibly amalgamate NSEL with FTIL, when the challenge to the FMC (Forward Markets Commission) order is pending and the question of whether or not FTIL is liable for the alleged events at NSEL is pending adjudication before the Bombay High Court?" Chary said in the letter.
Post merger, NSEL's entire business, properties and liabilities, among others, will get transferred to FTIL. The payment crisis at NSEL came to light in July 2013.
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