The Supreme Court declared the government’s amalgamation of the NSEL with its parent company FTIL as a violation of both the Constitution and the Companies Act.
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The Supreme Court declared the government’s amalgamation of the National Spot Exchange Ltd. (NSEL) with Financial Technologies India Ltd. (FTIL), now known as 63 Moons Technologies Ltd., as a violation of both the Section 396 of the Companies Act and contrary to Article 14 (right to equality) of the Constitution.
63 Moons, formerly known as FTIL, had approached the Supreme Court after the Bombay high court approved a 2016 order of the ministry of corporate affairs (MCA) to merge FTIL and its subsidiary NSEL after a Rs 5,600-crore scam made the exchange defunct in 2013.
This was the maiden attempt by the Indian government to merge two private companies in public interest.
According to Supreme court, there was “complete non-application of mind by the authority assessing compensation to the rights and interests of the shareholders and creditors of FTIL under Section 396(3) of the Companies Act”.
Had the apex court agreed to the merger, FTIL would have been Saddled with the trading platform’s liabilities.
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