 "Court gives time till Oct 31 to MCA to pass its order on FTIL-NSEL merger")
The direction came in response to several extensions sought for the final order by MCA, as the hearing of all parties was not yet completed. Earlier, the court had asked the ministry to hear all parties, including FTIL and its promoters, shareholders, NSEL, its traders, members and all related parties before a final order. Following that, the ministry asked FTIL and NSEL for their views.
The ministry was reluctant to share on what basis the commodities derivatives market regulator, the Forward Markets Commission (FMC) for recommended the merger last year.
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A year ago, FMC had sent a recommendation to the ministry for the merger. It argued NSEL did not have enough resources to recover Rs 5,600 crore from defaulting borrowers.
NSEL has, however, made efforts and secured decrees worth Rs 1,200 crore and injunctions worth Rs 3,300 crore on borrowers’ properties, which suggest they had the resources.
FTIL also sought shareholders’ approval for providing a Rs 50 crore fund to NSEL to meet legal and other expenses required to recover money from the borrowers.
The court has directed the ministry to provide certain documents to FTIL within seven days. It also granted 10 days to file an additional representation by FTIL from the date of inspection and the ministry to hear the parties within two weeks thereafter.
In case the ministry decides in favour of the proposed merger, HC would hear the case on November 19. In a separate hearing on Thursday, the court directed the Securities & Exchange Board of India to provide information as sought by Smita Bhartia, an NSEL investor.