Deal culminated – FTIL clinches agreement with sale of 1.65 shares to Rakesh Jhunjhunwala

Further developments in FTIL’s shares sale process! A transaction that was initiated last month has been finally clinched; Further 1.65 lac shares have been sold by FTIL to Rakesh Jhujhunwala for Rs. 2.47 lac in MCX-SX stock exchange. This is believed to have completed the departing process. This was pursuant to the agreement signed by FTIL towards selling its whole 5% stake, including 2.7 crore equity shares and 56,24,60,000 warrants for Rs. 88.41 crore.

This was also revision to the original agreement, in response to the clarification requirement of BSE last week, particularly, on the stake sale that took place in November, 2014.  

Also, there were separate warrant purchase agreements that were entered into, by FTIL, with Edelweiss Commodities Services, Viral Parikh, Trust Investments, Derive Investments, Nemish Shah, Dhanesh Sumatilal Shah, Kalpraj Dharamshi, Renuka Shah, Uday Shah, Madhuri Kela, Madhu Vadera Jayakumar and Capital & Research.

As per the clarification to BSE, an unsupported error in communication, on 25 November, 2014, appeared stating the company exited entirely from MCX-SX. Thus making amends, FTIL clarified that now the whole culmination has taken place with this further sale of shares to Jhunjhunwala. The excerpts from FTIL’s clarification stated, "...nominal 165,000 equity shares were missed out due to decimal calculation which was subsequently sold to Rakesh Jhunjhunwala by entering into an amendment agreement completing the sale of total share of 2,71,65,000 on the basis of the present capital of MCX-SX.”

Thus, with this deal, FTIL has totally exited from MCX-SX. 

(Source - http://economictimes.indiatimes.com/markets/stocks/news/financial-technologies-india-ltd-sells-1-65-lakh-shares-of-mcx-sx-to-rakesh-jhunjhunwala/articleshow/45415330.cms

http://www.business-standard.com/article/markets/ftil-sells-additional-1-65-lakh-mcx-sx-shares-to-jhunjhunwala-114120800243_1.html) 

Supreme Court dismisses SLP against Jignesh Shah’s bail

Pursuits defanged; efforts for special leave petition against Jignesh Shah’s bail order stymied

The scenes seem more ratcheted with the goings-on. Getting in the act, the efforts made by several trading clients of the crisis-hit NSEL was to reap self-desired fruition - by challenging the bail granted to Jignesh Shah, the promoter of FTIL by the Bombay high court, on 22^nd August, 2014, in the Supreme Court. Earlier this year, in August, Justice Abhay Thipsay of Bombay HC had granted bail to Jignesh Shah. 

Ultimately, the Supreme Court quashed the plea of the trading clients on Monday, 17^th November, 2014. What’s more; the state of Maharashtra wasn’t even issued notices by the bench that comprised Justice Pinaki Chandra Ghose and R K Agarwal.

To peal the overhang of the past happenings, trading clients exercised expedience. Discernibly, the appeal was in vain, when the SC quashed their special leave petition on Monday. It was flatly dismissed with no relief grant to them. Retrospectively, Justice Thipsay granted bail to Jignesh Shah, additionally stating that his custody was not necessary anymore for further investigation.

The HC then, in its judgement, pronounced saying, “Though termed as a "Rs 5000 crore NSEL scam", it is not that monies were received by NSEL, but they have gone from one bogus trader (investor) to another bogus trader (borrower).”

On another occasion, hearing on Forward Markets Commission’s mid-December order, last year, asserting that FTIL was ‘not fit and proper’ to hold shares in MCX or any other entity was before Judge S J Vazidar, last week.

On the occasion, Abhishek Manu Singhvi, FTIL’s counsel, said that the FMC’s order was implemented by the SEBI (Securities Exchange Bureau and Central Electricity Regulatory Commission (CERC) and constrained the company to go for a harried sale of its stakes in IEX, MCX and MCX-SX, which adversely impacted the companies’ valuation, entailing FTIL an enormous loss of over Rs. 1000 crore. In other words, the exits were, in a way, enforced ones, making the company face the brunt of financial damages.

“The FMC order was also being used by the government to forcibly merge the crisis-struck National Spot Exchange Limited (NSEL) with FTIL.”

FTIL’s argument was that the overall exit and sale of stakes have been ominously unsavoury; firstly, a loss of Rs. 291 crore in MCX; then Rs.250 crore lost in IEX and Rs.280 crore lost in the sale of MCX-SX stake. Furthermore, losses of Rs.11 crore from stake in Bourse Africa and Bahrain Financial Exchange incurred by the company steamrolled the state of affairs.

Counsel Singhvi’s view is – “the FMC order was also being used by the government to forcibly merge the crisis-struck National Spot Exchange (NSEL) with FTIL.”

FTIL was steadfast in filing a Writ Petition in the Bombay High Court against the government’s order to amalgamate NSEL with FTIL.

Also, the news featuring on Business Standard on 13^th Nov. 2014, reads, “FTIL also argued the fit and proper order did not specify the penalty for FTIL. This came six months later, forcing them to exit MCX at a loss.”

Unjust demeanour is evident; prejudices of sorts supersede the course of law, leaving mere footprints of agony for the present and future investors. It’s for us to muse earnestly if all of this is benign or malignant to the health of the economy at large. 

FTIL’s most recent accord with Jhunjhunwala, exiting MCX-SX

Crossing the thresholds, departing MCX-SX, FTIL entered a pact with Rakesh Jhujhunwala, selling its stake and warrants in stocks bourse to the latter.

Expressively, a share and warrant purchase agreement was entered into,  with Dr. Rakesh Jhunjhunwala; whilst separate warrant purchase agreements were moved in by FTIL, with M/s. Edelweiss Financial Services Limited, M/s. Trust Investment Advisors Pvt. Ltd. Ms. Viral A. Parikh, M/s. Nemish S. Shah H.U.F., M/s. Derive Investments, Mr. Kalpraj Dharamshi, Mr. Dhanesh Sumatilal Shah, Mr. Uday Shah, Ms. Madhuri Kela, Ms. Renuka Shah, M/s. SKS Capital & Research Pvt. Ltd. and Ms. Madhu Vadera Jayakumar for sale of its 100% stake in MCX-SX comprising 2,70,00,000 equity shares and 56,24,60,000 warrants for an aggregate consideration of Rs. 88.419 crore.

Rakesh jhunjhunwala, a billionaire investor, had earlier purchased stock of MCX - close to 2%, earlier this year, now purchased stock of MCX-SX, thus enabling FTIL to exit MCX-SX entirely. FTIL divested all of MCX-SX stock, which took place on 26 November, 2014. 

Jignesh Shah paves way - twirling up gen-next dimensions for FTIL

Transferring action to manage the state of affairs at FTIL, Jignesh Shah will not be holding any executive or managerial position in the company. A series of events did the rounds in the company lately, with the induction of new members in FTIL board last week and now the elaborate change of management that took place on 20^th November, 2014.

Overlaying a purposeful structure with constructive intents, making way for new entrants into the Board of FTIL, Jignesh Shah has charted the next phase of growth for the company. The relay took place when he handed over the cudgel of responsibilities and management of FTIL to various individuals of repute and sublime credentials.

Jignesh Shah was invited to be Chairman – Emeritus and Mentor of FTIL, and inspire entrepreneurship, whilst Prashant Desai was handed over a bigger responsibility having been appointed as MD-CEO of FTIL by the board. He is also expected to oversee the execution of the founder’s vision of FT 3.0.

The expansion of the board with 3 non-executive directors was also announced on the occasion i.e. Ms. Nisha Dutt , Mr. Sunil Shah and Mr. Miten Mehta. Ms. Nisha Dutt is a Silicon Valley veteran who holds M.S. and MBA degrees from Oklahoma State University and Ohio University, having over a decade’s consulting and technology experience in over a dozen countries. Mr. Sunil Shah is an IIM - A alumnus and founder of Gujarat Innovation Society and Mr. Miten Mehta, qualified from Kellogg’s, has twenty years of extensive experience of Silicon Valley and US.

Additionally, two more executive directors were included in the board - Mr. Jigish Sonagra and and Mr. Rajendra Mehta. Mr. Jigish Sonagra holds a business management degree and is qualified as Chartered Accountant and CISA Auditor with 14 years of rich experience in exchange technology and related products. He will be the Director - New Ventures of the Company.

Mr. Rajendra Mehta is a qualified Chartered Accountant with over 20 years of experience in banking & financial sector, and is ex-COO of CLSA. Mr. Rajendra Mehta will be Director - Member Technologies of the Company. Further, Mr. Manjay Shah and Mr. Dewang Neralla will exit from the Board of the Company. Mr. Dewang Neralla will become MD & CEO of Atom Technologies and Mr. Manjay Shah will become MD & CEO of Tickerplant.

Interestingly, it is a reconstituted board with 12 members and 5 non-executive directors and independent directors; 4 executive directors and 3 non-executive directors. The board already comprises IAS (Retd.) officers, chartered accountants, lawyers and successful entrepreneurs with start-up and corporate experience along with two directors with international exposure, making it among one of the most independent and professional board-run companies in corporate India, and is all geared up to avail the existing and new opportunities presented by the digital era.

Also, the ‘JS Digital Innovative Award’ established to honour the contribution of FTIL’s founder Jignesh Shah was unanimously approved on the occasion. The growth trajectory of FTIL has witnessed myriad dimensions and diverse paradigm technology innovation and implementation since inception, having been founded by Jignesh Shah and two of his colleagues. Several exchanges and trading terminals were set up, with a consummate distribution network, linking India with Middle East, Africa and South East Asia. Exemplarily, they were known for recreating new-age digital silk and spice routes.

More transcendent accomplishments were setting up of MCX, MCX-SX and IEX in India, SMX in Singapore, DGCX in Dubai and Bourse Africa in Mauritius, by FTIL with his vision, under Jignesh Shah’s leadership. They are among the most globally respected and recognised institutions in their respective market segments and geographies.

The announcement came after the board expansion, with induction of Berjis Desai and Anil Singhvi into the board last week, along with the founder’s vision projection for Digital India @2025 as part of FT 3.0 Made in India technology to build and power India’s own equivalent of Amazon, Google, Alibaba and Baidu et al over the next 10 years.