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Financial Technologies (FTIL) has told the Bombay High Court that it had devised an automated system to route shareholder responses to the ministry of corporate affairs (MCA) on a draft order to merge it with its subsidiary, National Spot Exchange (NSEL). Last year, the ministry had passed the draft order as a solution to the Rs 5,600 crore payment crisis at NSEL. After an interim stay on the order was lifted in February, the ministry had given a month's time for public feedback.
In an affidavit to the court last month, MCA had alleged it received about 45,000 similarly worded representations from FTIL shareholders, which it said were being deliberately sent in a 'concerted manner' to delay its decision-making.
It had also submitted to the court dozens of responses, of 'repetitive language' and from the same email ID shareholder @ftindia.com, raising suspicions about the genuineness of the responses.
In an affidavit, FTIL denied the charges. The company said: "To enable its shareholders to conveniently signify their assent/dissent to the proposed merger of the third respondent (NSEL) with the 1st petitioner (FTIL), the 1st petitioner set up a process where shareholders could signify their preference. To make the process simple and easily accessible, the concerned shareholder was only required to tick his answers to the various options provided in the process and for such reason, the submissions / representations look similar and not as 'stereotyped" as alleged." The affidavit added that: "On the basis of the options chosen an email would be generated from the email address 'shareholder@ftindia.com' and would be sent to the 1st Respondent."
FTIL accused the ministry of "undermining shareholders' rights to give their consent / dissent, which is within the ambit of the law."
The company further said the number of responses only showed the extent of public outcry over the decision. "It is submitted that the fact that the 1st Respondent has been flooded with over 45,000 representations from the shareholders of the Petitioner goes to show the severe public outcry against the forced merger …" and that public interest demands that there be no amalgamation as proposed.
It also referred to MCA's own submissions that it had received representations from 19,000 persons. "Further, the 1st Respondent accepted the representations after the prescribed time limit only because due to quantum of responses received, the 1st Respondent's email inbox got choked and was unable to handle the volume, resulting in several emails bouncing back for no fault of, the senders," the FTIL affidavit said.
