SC shoots down order for NSEL 63 Moons merger

By Naziya Beg 

THE Supreme Court on 30 April 2019 set aside the government's final order for the merger of scam-hit National Spot Exchange Ltd (NSEL) with 63 Moons Technologies, formerly Financial Technology India Ltd(FTIL).

NSEL was incorporated in 2005 as as an electronic trading platform for treading of commodities for treading of commodities. On July 31, 2013, NESL had defaulted on payments to the tune of Re.5,600 crore to nearly 13,000 investors, following which trading on the spot exchange was  suspended. 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 (SEBI).

The Ministry of Corporate Affairs (MCA) in February 2016 passed a final order directing the merger of scam hit NSEL with FTIL. The draft order was issued in October 2014. It was the first case of the government ordering merger of two private sector companies under Section 396 of the Companies Act 1956.

The 63 Moons Technologies had last year (along with other applicants) filed multiple Special Leave Petitions in Supreme Court, challenging a Bombay High Court verdict upholding the MCA order. The apex court has allowed an appeal against the Bombay High Court order upholding the merger decision. "We have allowed the appeal ,"said a bench of Justice Rohinton Fail Nariman and Justice Vineet Saran in their judgement.

The supreme Court on last day 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 on the judgment, 63  Moons Technologies said that the company has been articulating in past that the merger will serve no purpose for the stakeholders of either NSEL of FTIL, but will only benefit "a few people with vested interests". It said that as such, it stand has been fully vindicated.

"Justice has finally prevailed in the reasoned and well-articulated judgment of the Supreme Court, which has upheld the rule of law by laying down the elaborate criterion for what is public interest and due process,"said Vanket Chary, chairman, 63 Moons Technologies.