SC sets aside merger of NSEL with 63 Moon Technologies

The Supreme Court on Tuesday allowed a plea against the Union government's order for the merger of over Rs 5500 crore scam-hit National Spot Exchange Ltd with Financial Technologies India Ltd, now known as 63 Moons Technologies Ltd, in public interest.

A bench of Justices R F Nariman and Vineet Saran said the court has laid guidelines as to what constituted public interest.

The order has come as a relief for Jignesh Shah, who controlled NSEL through FTIL. He was also arrested and faced criminal proceedings related to the scam, separately.

The top court had on April 11 reserved its judgement on a batch of petitions filed by 63 Moon Technologies Ltd (formerly FTIL) and Jignesh Shah challenging the Bombay High Court 's order upholding merger of scam-hit NSEL with FTIL.

The HC had upheld the Ministry of Corporate Affairs' order for the merger.

The high court had on December 4, last dismissed the writ petition by Financial Technologies India Ltd. The Ministry of Corporate Affairs had in February 2016 directed for the merger of scam-hit National Spot Exchange Ltd with the FTIL.

It was described as the first case of the government ordering merger of two private sector companies under Section 396 of the Companies Act.

The high court, however, had given 12-week stay on the operation of the merger order.

It had said the merger was being made in public interest as in extraordinary situations arose after the collapse of commodity stock exchange.

Notably, Jignesh Shah controlled FTIL owned 99.99% of NSEL wherein trading was suspended in July 2013 after payments crisis to the tune of Rs 5574.35 crore surfaced over there.