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NSEL-FTIL merger is delayed


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No procrastinating tactics used by both the companies for the delay of the merger.

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NSEL-FTIL merger is delayed

  1. 1. NSEL-FTIL Merger is delayed
  2. 2. How merger delayed? • The Final Verdict delayed • Reason of denial to amalgamate • CLB barred FTIL to sell assets • Section 397 of Companies Act, 1956 • Partial relief granted • Government rules… • MCA
  3. 3. The Final Verdict delayed • Final verdict to merge National spot exchange Ltd (NSEL) with its parent company Financial Technologies India Limited (FTIL) delayed for a month. • Ministry of Corporate Affairs (MCA) granted hearing to both FTIL and NSEL on July 7 and 8 whereas further hearing was postponed by four weeks.
  4. 4. Reason of denial to amalgamate • Both the companies have also given an evenhanded notice to High Court for the reason of denial of amalgamation. • Officers of investigative agencies asserted that there is no provision for hearing for merger as Bombay HC asked officers to hear the companies out and so the opportunity was granted. • There were no such procrastinating tactics used by both the companies for the delay of the merger.
  5. 5. CLB barred FTIL to sell assets • FTIL was barred lately by CLB from selling company’s assets till 2nd September 2015. • Bombay High court was hearing the government’s petition to supersede the FTIL board • The court said there would be status quo on the sale of property and assets.
  6. 6. Section 397 of Companies Act, 1956 • MCA had moved board seeking removal and supersession of FTIL board under Section 397 of the Companies Act, 1956. • In its petition, government also wanted Jignesh Shah who promoted FTIL be restrained from disposing off its assets on the ground that it would defeat the purpose of the merger with NSEL.
  7. 7. Partial relief granted • However, Madras high court gave a partial relief to company saying it could deal with its investments. • Earlier, government was given a deadline of April 6 by the High Court to issue a final order on the merger.
  8. 8. Government rules… • However, government sought three months more to review 19,000-odd objections from FTIL shareholders and related parties before passing an order. • High Court had directed the government on February 4 to consider all objections before doing so.
  9. 9. MCA • MCA has also finalized share swap ratio for proposed merger of NSEL with FTIL. • MCA has decided that three fully paid-up equity shares of Rs. 2 each of FTIL will be issued in exchange of eight fully paid-up equity shares of Rs 10 each of NSEL. • The order, made public recently, will be effective only after the government takes a final decision on the merger.