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Ahead of a possible amalgamation with National Spot Exchange (NSEL), its ailing subsidiary, Financial Technologies (FTIL) has decided to spin off its major business, Odin, into a separate subsidiary or strategic business unit, so as to attract a majority investor.
FTIL stated the company had decided to spin off Odin, its flagship product for brokerages, into a separate entity for attracting a strategic partner. Odin contributes around 15 per cent to FTIL's annual turnover.
Also, FTIL has revamped its board of directors. It has inducted Berjis Desai and Anil Singhvi as non-executive directors. The company also announced inclusion of Prashant Desai as an executive director to its board. With this, the total number of directors is 10, with Venkat Chary as chairman (independent non-executive director) and Jignesh Shah as founder and managing director. Berjis is a solicitor and advocate, and managing partner of J Sagar Associates, a city-based law firm, Singhvi, a chartered accountant, is chairman of Ican Investments Advisors. Desai possesses over two decades of experience in investor relations.
This restructuring comes in the wake of the government's statement that it was considering revamping the FTIL board in connection with the Rs 5,600-crore scam in NSEL last year, involving 13,000 investors.
"The board also reiterated its support for the management's steadfast commitment to continue to engage and keep dialogue open with the government and the authorities concerned in resolving the NSEL crisis on an expedited basis and arrive at a solution, within the judicial framework that is fair, just and equitable to all stakeholders. The board also took note of the appointment of a global and an Indian investment banker for the purpose of attracting majority strategic partner/investor into FTIL's member technology business and the creation of a separate subsidiary for the same, if required," FTIL stated.
The commodities derivatives market regulator, Forward Markets Commission (FMC), has proposed merger of NSEL with FTIL. The Union ministry of corporate affairs has sought recommendations from both NSEL and FTIL on FMC's recommendation.
Chary has said such a merger would set a bad precedent and warned of a cascading effect on corporate India. However, investors say that's the only option for recovering money from the 23 defaulting borrowers.
Founded by Jignesh Shah, Dewang Neralla and Ghanshyam Rohira as a technology provider for financial markets, FTIL is Number 2 by licensing volume in the space, operating the largest financial distribution network in the country through its Odin suite or trading terminals, with close to a million licensees from about 600 cities, towns and villages.
FTIL's second phase was its evolution into creating and operating financial markets (exchanges) across India, West Asia, Africa and Southeast Asia, connecting these markets through online trade and commerce. MCX, SX and IEX in India, SMX in Singapore, DGCX in Dubai and Bourse Africa in Mauritius, all set up by FTIL, are globally respected institutions in their respective market segments and regions.
