Assocham against NSEL merger with parent Financial Technologies

Assocham said that a company cannot be held liable for "any alleged liability" of a subsidiary, unless so adjudicated by a court of law

 

Industry chamber Assocham said on Sunday that it has written to Finance Minister Arun Jaitley to reconsider the draft merger order of the National Spot Exchange Ltd (NSEL) with its parent firm Financial Technologies (India) Ltd (FTIL) in the larger interests of domestic trade and industry.
 
"The proposed forced amalgamation of NSEL with FTIL through an administrative order would set a very dangerous precedent in the domestic corporate sector, as it ignores valuable rights granted under law to the various stakeholders of a company," the Associated Chambers of Commerce and Industry of India said in the letter to Jaitley, who is also the minister of corporate affairs.
 
To safeguard the interest of investors and creditors in the face of a Rs.5,600-crore payments crisis at NSEL, the corporate affairs ministry had last year proposed a merger of the spot exchange with FTIL.
 
FTIL said last month that 99.55 percent of the shareholders have objected to the proposed amalgamation of NSEL - which represents 79.58 percent of its total equity capital.
 
Assocham said that a company cannot be held liable for "any alleged liability" of a subsidiary, unless so adjudicated by a court of law.
 
"It will destroy the concept of 'limited liability' which is the fundamental principle of corporate jurisprudence," it said.
 
It also claimed the merger would adversely affect over 63,000 shareholders and more than 1,000 employees at FTIL.
 
It said the ministry has finalised the share swap ratio for the proposed merger of "crisis-hit NSEL with its holding company FTIL."
 
"However, the share swap assessment order will be effective only after the government takes a final decision on merger," the statement added.
 
The controversy took a new turn on March 31 with the FTIL management proposing a settlement with traders who lost their money while dealing at the commodity bourse.
 
"We have proposed a solution that ensures that 94 percent trading clients receive between 50 and 100 percent of their claims", chief executive and managing director of Financial Technologies Prashant Desai said in a statement.
 

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COMMENTS

LALIT SHAH

9 months ago

I am a share holder of financial technology and victim of wrong doing by MCA to merge NSEL with FT my and so many investors interest hurt by government to merge to save some big entity in NSEL scam also this merger is against company low plese as a org fight for common small investors

280 million Indians don't have power connection: Piyush Goyal

Goyal asked the ISB to come up with a proposal for an innovative laboratory on energy conservation for which his ministry was ready to provide funds

 

Around 280 million people in the country do not have basic electricity connection, Minister for Power, Coal and New and Renewable Energy Piyush Goyal said on Sunday.
 
"Around 280 million people in India to this day do not have electricity connection at their homes. Till date, they are denied the basic thing like power," Goyal said while addressing the graduating class of the Indian School of Business (ISB) here.
 
"The country's problem is not about the amount of power generation or the ability to generate. We have surplus power in large parts of the country," he added.
 
"The mission we have set out to achieve is to get power for all by 2019 not by merely slogans but by actionable agenda, by true action on the ground," the minister said.
 
He said his ministry was focusing on energy efficiency in a big way
 
"On mathematical principles, 1.33 times of every unit of energy is saved given that India has an average 25 percent of AT&C (Aggregate Technical and Commercial) losses even today. So, for every unit saved, I am saving 1.33 unit."
 
"In 2.5 years from now, I can bring down energy wastage by 10 percent and am looking at powering those 280 million homes out of this energy saved," Goyal said.
 
Goyal asked the ISB to come up with a proposal for an innovative laboratory on energy conservation for which his ministry was ready to provide funds.

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