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The high court here on Wednesday adjourned hearing till March 11 of the petition filed by Financial Technologies (FTIL) to stop the removal of its board of directors. The stay on this will continue till then.
FTIL petitioned to restrain the Union ministry of corporate affairs’ attempt to supersede its board. The MCA had approached the Company Law Board (CLB) for this. The bench of judges V M Kanade and A R Joshi asked MCA to file a short reply in the court before the next hearing.
Meanwhile, it allowed the Forward Markets Commission (FMC), regulator for the market segment, to be made a party to the petition. The FMC counsel argued that as the issue relates to the order issued by the regulator on December 17, 2013, declaring FTIL not fit to hold stake in any exchange including any it promoted, it should be made a party.
The whole issue started with 24 borrowers of the now defunct National Spot Exchange (NSEL), a FTIL-promoted spot commodity trading platform, defaulting on Rs 5,600 crore of payment to 13,000 investors. In August 2013, the exchange was ordered not to launch any new contracts.
Since then, investigations are on by various agencies, including the economic offences wing of the city police, the enforcement directorate and others. A number of cases have been filed by various investor groups, defaulters, NSEL and FTIL, challenging orders by diverse authorities.
Proceeding on the recommendation by FMC to merge NSEL with itself, a matter also in court, MCA had approached the CLB, accusing the board of FTIL of mismanagement and fraud. This has also been challenged at the HC, which had told it not to pass an order for the time being. CLB, therefore, adjourned the hearing on this till March 19.
Ketan Shah, founder of NSEL Investors’ Action Group, alleged NSEL director Madhoo Pavaskar has leveled allegations against him on social media of accepting Rs 2 crore as financial support from NSEL investors to fight the case against NSEL. “Kindly ask them (the counsels of NSEL and FTIL) to prove an instance of me accepting even Rs 200 from any investor or anyone,” Shah told the bench. Judge Kanade told Shah to file an affidavit.
