MUMBAI: The government has stated that its final order to merge scam-hit National Spot Exchange (NSEL) with its parent FTIL, does not presuppose any liability on the latter for defaults on the spot exchange that went belly up in July 2013.
“It is submitted that petitioner No 1 (FTIL) …..is listed in various stock exchanges in India. The claims of ….(FTIL) to possess a certain reputation in the market due to their high professional accomplishments in their businesses are denied. The impugned order dated 12-02-2016 does not impose any liability on petitioner No 1 for the defaults on an exchange of Respondent No 3 (NSEL).”
The government filed its reply, based on a Bombay High Court direction, to the amended petition of FTIL against the merger under Section 396 of the Companies Act, 1956. The government passed a final order of merger in the public interest on Feb 12 this year. The matter will be heard on July 25. It also countered FTIL’s allegation that it had based its merger order on Forward Markets Commission’s (FMC) not fit and proper order against FTIL (to be a shareholder of A commodity exchange in light of the scam) in December 2013 without application of mind.
It stated that it had considered not just the Commission’s order but the oral submissions of FTIL on Oct 13 last year and written submissions against the merger subsequently. It stated that neither the Bombay HC nor Supreme Court had stayed the FMC order as sought by FTIL. FMC was the erstwhile regulator of national commodity exchanges, which were bought under Sebi’s purview in September last year to strengthen oversight on the commodity futures market post the scam.
