This Article is From Mar 10, 2015

Most Shareholders Oppose Proposed Merger of NSEL with FTIL'

New Delhi: Financial Technologies on Tuesday said that over 18,700 shareholders, representing 79.58 per cent share capital of the company, have objected to the proposed merger of crisis-hit NSEL with it.

The government in October last year had ordered merger of National Spot Exchange Ltd (NSEL) with its parent firm Financial Technology India Ltd (FTIL).

The draft order, issued by the Ministry of Corporate Affairs (MCA), was aimed at ensuring faster recovery of dues for entities hit by Rs 5,600-crore fraud at the bourse.

In a statement, FTIL said that "99.55 per cent of the shareholders have objected to the proposed amalgamation of NSEL with the FTIL, which represents 79.58 per cent of total equity capital of the company, while a mere 0.45 per cent were in favour of it."

FTIL said that the results were computed from the response of over 18,700 shareholders who have sent an email to MCA and marked a copy to the FTIL. About 12,500 mails bounced back and the hard copies of the same on a CD were sent to the MCA.

The company said that the data was verified by an independent auditor M/s KDS & Co.

"Also, 100 per cent of creditors, the entire Board of Directors and 100 per cent of the over 1,000 employees of the company objected to the amalgamation," FTIL said.

Last month, FTIL had asked its shareholders to oppose the proposed merger of NSEL with it.

"We are obliged and thankful to our shareholders and creditors who have joined hands with us to raise their concern on the proposed amalgamation of NSEL with FTIL, with the MCA.

The proposal is detrimental to interest of 63,000 shareholders and over 1,000 employees of FTIL," FTIL chairman Venkat Chary said.

Promoters have 45.63 per cent stake in FTIL.

Mr Chary said nearly 80 per cent of company's shareholding and majority of other stake holders have clearly indicated that they are against the proposed amalgamation in the name of public interest of trading clients of NSEL.

"While the recent report clearly questions the genuineness of 13,000 numbers of trading clients coupled with entitlement thereof, whereas the approximate 80 per cent shareholding are real investors with complete KYC bona-fide owners of the company who have objected to the amalgamation and have expressed solidarity and faith in the company and its management," Mr Chary said.

FTIL said that the company is committed to engage and keep dialogue open with the various government departments and concerned authorities in resolving the crisis and settlement of defaults that took place at NSEL's trading platform.