Mumbai: In a major relief to Jignesh Shah-led 63 Moons Technologies, the Supreme Court on Tuesday set aside a government order to merge National Spot Exchange (NSEL) with its parent 63 Moons Technologies, as it doesn't satisfy the criteria of 'public interest'.
The apex court said it has laid down what constitutes public interest.
The merger proposed by the Ministry of Corporate Affairs in 2016 was the first case when the Centre passed a merger order of the two private companies in 'public interest'.
In December 2017, the Bombay HC upheld the government decision.
The order was later challenged in the Supreme Court and on April 11, the apex court had reserved judgement on PILs filed by 63 Moons, NSEL, Jignesh Shah, a few Financial Technologies of India Ltd (FTIL) employees and shareholders.
In February 2016, the MCA had passed a final order directing the merger of scam-hit NSEL with 63 Moons (FTIL). FTIL, promoted by Jignesh Shah, is the parent company of NSEL with 99 per cent shareholding.
“We have allowed the appeal,” said a bench of Justice Rohinton Fali Nariman and Justice Vineet Saran in their judgment setting aside the High Court order.
The court on Tuesday held that the merger doesn’t satisfy the criteria of ‘public interest’ and laid down a set of guidelines on what ‘public interest’ would amount to.
Reacting to the order Jignesh Shah, Chairman Emeritus and Mentor, 63 Moons Technologies, said, “We have always had full faith in the Indian judiciary and our Hon. courts. Finally, truth has prevailed.”
While welcoming the judgment, S Rajendran, MD, 63 Moons Techno-logies, said the company has been articulating in the past that the merger will serve no purpose for the stakeholders of either NSEL or FTIL but to benefit only a few people with vested interest. As such, our stand has been fully vindicated.
NSEL, which was promoted by the then FTIL, shut down in 2013 after a major payment default. NSEL has since been ordered not to enter into any fresh contracts by the Forward Markets Commission (FMC), which has since been integrated into the Securities and Exchange Board of India.
NSEL investors had approached the PMO and MCA highlighting the delay in the case and recovery of their dues. They received only Rs 65 crore of the recovery amount in the six years since the scam surfaced.