The shareholders of Financial Technologies (India) Ltd have formed an association to jointly oppose the Government-proposed merger of the company with its scam-ridden subsidiary, National Spot Exchange Ltd (NSEL).

Last October, the Ministry of Corporate Affairs had issued a draft order on the merger. The proposal got a conditional approval from the Bombay High Court after a long legal battle.

The last date for seeking public comment on the issue is March 5.

The association, named Share Holders’ Association of FTIL (SHAFT), said the sole purpose of the draft order is to transfer the alleged and unproven claims of about ₹5,600 crore on NSEL to FTIL despite the matter being sub-judice.

The action by the commodity market regulator, Forward Markets Commission, is only against the company and almost no action is taken either against defaulters or the brokers of NSEL, it said. The book value of FTIL is ₹614 and has cash reserves of over ₹500 a share. If the order is passed, it added, the value of FTIL will become zero.

In a separate letter to shareholders, Venkat Chary, Chairman of the Board, FTIL, said the writ petition filed by the company in the Bombay High Court to oppose the merger was further strengthened by similar appeal by the company’s bankers, including Syndicate Bank, Union Bank, Standard Chartered Bank and DBS Bank of Singapore, besides public shareholders and employees.

FTIL has cash reserves of ₹2,000 crore and debts of ₹475 crore, after it was forced to sell stakes in its subsidiary MCX Stock Exchange, Indian Energy Exchange (sale yet to be concluded), National Bulk Handling Corporation and Singapore Mercantile Exchange in the last one year, he said.

Claiming that the cash belongs to the 63,000 shareholders of FTIL, Chary said: “You (shareholders), too, are entitled to object the forced amalgamation of NSEL with your company (FTIL) by exercising your right of opposition under Section 396 of the Companies Act, 1956.”

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