Financial Technolgies' notice for AGM does not even mention NSEL. Meanwhile, Ravi K Sheth, a longtime director and confidant of Jignesh Shah, has decided not to seek re-appointment
Financial Technologies (India) Ltd (FT), the promoter of scam-ridden National Spot Exchange Ltd (NSEL) does not even mention the name of the Exchange in the agenda for its 
upcoming annual general meeting (AGM). This is surprising especially as its main promoter, it is the responsibility of FT to answer questions arisen about the crisis at NSEL, especially since NSEL contributed more than Rs120 crore in profits to FT last year.
The Jignesh Shah-led financial software company and promoter of several exchanges in India and abroad such as MCX, MCX-SX, DGCX in Dubai etc. is holding its 25th AGM on 25 September at Chennai. The company has sent shareholders three notices dated 22nd August, 27th August and 30th August in a file on a single day.
Interestingly, Ravi K Sheth, director of FT for almost 20 years – going back to 1994 -- has become the latest to resign from the company. Sheth is not seeking re-appointment and FT has decided not to fill the vacancy created by his resignation.
On the other hand, N Balasubramanian, who was appointed as additional director on 22 August 2013 is seeking appointment as director. Balasubramanian, the former chairman and managing director of Small Industries Development Bank of India (SIDBI) was also associated with the Planning Commission in preparing five-years plan documents, focussed on SME, as the chairman of the sub-committee.
Even since the NSEL crisis started, directors have been running away from various companies of the group like rats deserting a sinking ship.
Sr No | FinTech | NSEL | MCX |
1 | Ramanathan Devarajan | Shankarlal Guru | Venkat Chary |
2 | Padmanabh R Barpande | Ramanathan Devarajan | CM Maniar |
3 | CM Maniar | BD Pawar | Lambertus Rutten |
4 | N Balasubramanian | Shreekant Javalgekar | Padmanabh R Barpande |
5 | Ravi K Sheth |
| Prakash Apte |
6 |
|
| Shvetal S Vakil |
Directors left in the company | |||
1 | Jignesh Shah | Jignesh Shah | Jignesh Shah |
2 | Dewang Neralla | Joseph Massey | Joseph Massey |
3 | Manjay Shah |
| Paras Ajmera |
4 | Chandrakant Kamdar |
| RM Premkumar |
5 |
|
| P Satish |
6 |
|
| Ravi Kamal Bhargava |
7 |
|
| Dinesh Kumar Mehrotra |
At present, FT board comprises its chairman and group CEO Jignesh Shah, whole time directors Dewang Neralla and Manjay Shah (Jignesh’s Shah brother) and Chandrakant Kamdar.
Since the middle of July 2013, trading in NSEL has been suspended. NSEL has failed to make payouts to investors and failed to recover money from those who were supposed to make pay-ins. It now appears that there is not enough stock of commodities in the warehouses of NSEL against which warehouse receipts were issues. In August 2013, trading in e-series was also suspended. This was of concern for large number of investors who had purchased e-series products like e-gold.
Following the crisis, FT’s shares have crashed from a high of Rs870 in May to Rs114 today. The shares of MCX have fallen from a high of Rs1,015 in May to a low of Rs238 in August. It has shot up to around Rs400 now, hitting the upper circuit daily for the past two weeks. There are rumours that MCX will change hands.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
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The laws and rules that govern NSEL should derive from a simple and straightforward concept : all investors, whether large institutions or private individuals (big and small) should have had access to certain basic facts about NSEL prior to investment and so long as they hold the investments. To achieve this, Government should have insisted on NSEL to disclose meaningful financial and other information to the public. This would have provided a common pool of knowledge for all investors to use to judge for themselves whether to buy, sell, or hold a particular commodity like e-gold or e-silver. Only through the steady flow of timely, comprehensive, and accurate information can people make sound investment decisions. Unfortunately, this did not happen in the case of NSEL.
The result of this information flow is so important to our nation's economy. To insure that this objective is met, the Government should continually work with the market participants, including especially the investors, to listen to their concerns and to learn from their experience.
The Government must oversee the key participants in NSEL, including brokers and dealers, borrowers, investment advisors, and mutual funds for maintaining fair dealings, and protecting against fraud. Crucial to the effectiveness in each of these areas is its enforcement authority.
The world of investing is fascinating and complex, and it can be very fruitful. It is not a spectator sport.
What about good Corporate Governance practices? If the Directors fail to disclose why have the Statutory Auditors not said it by qualifying their Corporate Governance Report?
Neither have they sent annual reports through email.
Virendra Jain