Status quo continues. Bombay HC has extended the stay on government’s NSEL-FTIL merger order till 4 February, 2015.
Perhaps new hopes elevated; the position is still as it is where it was; if it will mark a sublime beginning of the conclusion, is the question. Contrary to the unanimous views that emanated from a vast majority of the business fraternity and media spigots, the government has been steadfast in calling for an unwarranted merger of NSEL with FTIL, on 23 October, 2014. This caused a maelstrom of happenings all over, quaking business moorings and economy at large.
As scheduled, the hearing took place on 22 December, 2014, before Justice VM Kanade. The NSEL Investors Forum (NIF) was issued a notice for contempt of court; as the said forum had made allegations against the said Justice that he could be biased as his son had appeared for a nominee director of PD Agroprocessors, who is one of the defaulters in NSEL.
Who’s to judge whose integrity? Has faith in the judiciary among people dwindled, or is it just prejudicing to doubt eminence? But to affirm that justice is alive and omnipotent, the faith of both Forward Markets Commission’s (FMC) and Ministry of Corporate Affair’s (MCA) counsels in the judge was evident and audible in the court. They confirmed their acquiescence to it, reflecting their conviction and trust when they were asked if they had any objection, by the judge offering to recuse himself, if they had any.
On previous hearings, FTIL’s counsel Abhishek Manu Singhvi contended saying that the draft order for the amalgamation was issued under section 396 of the Companies Act and extended his argument stating that the merger needs to be approved by the boards of both the companies in question, along with the approval of ROC and Official Liquidator’s (OL) nod.
With hindsight, it was a recommendation by FMC and the department of economic affairs that triggered a shockwave which was followed by the government’s draft order for merger. The aim maybe to haste the merger, but it is, as debated all over, bound to dilapidate the scene adversely, and it is inimical for the economy and entrepreneurial growth at large. FTIL’s argument has been that the uncalled-for amalgamation will unavoidably transfer the default of NSEL to FTIL.
The fallout will prove to be "wet blanket" resulting in haplessness, plaguing the scene with waning interest among existing stakeholders, employees of the parent company, besides dismaying new investors across-the-board.