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Jignesh Shah, the founder of Financial Technologies (India) Ltd -- now renamed as 63 Moons, is among those alleged to have been involved in the Rs 5,600-crore payment crisis at the National Spot Exchange Ltd (NSEL).
63 Moons Technologies share price rallied 20 per cent to hit its upper circuit after the National Company Law Tribunal dismissed Ministry of Corporate Affairs' plea to supersede board of company in connection with payment defaults pertaining to its unit National Spot Exchange.
The stock gained as much as 20 per cent to Rs 86.90 on the BSE. The scrip has fallen 38 per cent so far this year up to Friday’s close.
NCLT also barred Jignesh Shah and nine others from holding directorship in 63 Moons Technologies as well as any other company.
Shah, the founder of Financial Technologies (India) Ltd -- now renamed as 63 Moons, is among those alleged to have been involved in the Rs 5,600-crore payment crisis at the National Spot Exchange Ltd (NSEL).
Besides, the tribunal has said the government can nominate up to three directors to the FTIL board to take care of the interest of all stakeholders as well as protect the company's investments in its subsidiaries.
The latest ruling pertains to a petition filed by the corporate affairs ministry seeking relief on various counts against the backdrop of the NSEL scam.
In a 36-page order, dated June 4, an NCLT Chennai bench said Shah and nine others are "not fit and proper persons" to hold the office as director or any other office connected with the conduct and management of FTIL and NSEL. Also, they are "not eligible for appointment as directors in any other company," it said. According to the tribunal, these individuals have conducted themselves in a manner prejudicial to the public interest.
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"... the actions of the respondents have shaken the public confidence in the Indian commodity markets.
"The failure of the said respondents in exercising due diligence has resulted in the suspension of trade in NSEL (Respondent 29) and has had/will have adverse effects on the members and other stakeholders of Respondent 1 (FTIL) also," the order said.
"We are extremely happy to note that NCLT has rejected Ministry of Corporate Affairs' prayer to supersede the board of 63 moons in connection with the payment defaults that occurred at one of our subsidiaries, NSEL in 2013," 63 Moons MD and CEO S Rajendran said in the statement.
"The order has also given a clean chit to the current board of 63 Moons of any alleged misconduct or wrongdoing against the interest of its shareholders," he added.
Rajendran also said that he was shocked to note that the NCLT order has applied Section 388B and such sections against some of the past directors who were not even on NSEL board.