Can FTIL’s Proposed Solution Crack NSEL Logjam?

Often the solution is easy and lies before our eyes, and yet we do not see it. We move mountains and cross oceans, and yet all the while the remedy was lying in plain sight in our own courtyard.

This is what is happening with the  NSEL issue. If all the stakeholders—FTIL, the trading clients, brokers, and the government— join hands, the payment default crisis at NSEL can be speedily resolved. In fact, FTIL’s proposed solution as outlined to the government can heal the wounds of all the stakeholders inflicted by the defaulters on NSEL’s trading platform.

In a manner of speaking, the solution would entail that the pain is evenly distributed. The money trail to the last paisa has been found with the defaulters and they should be held accountable for their actions. So far, without any reason, it is only FTIL that has borne the brunt of the crisis by facing various proceedings which are sub-judice.

The privity of contract of the trading clients is with the brokers. It is brokers which have made multi-times money while transacting on the exchange. It is therefore important that they participate in the settlement process to enable payment to trading clients.

According to Business Standard, published on March 20, Prashant Desai, the Managing Director & CEO of FTIL, said, “FTIL proposes to pay Rs. 500 crore, of which Rs. 180 crore was already paid in 2013, with the brokers contributing equally”.  The proposed solution is without prejudice and is subjected to FTIL shareholder and board approval.

If all the parties concerned agree to implement it with government help, all trading clients with exposure of up to Rs. 1 crore, which are 11, 954 in number, will get at least half their dues as reported in the Business Standard article. The PSUs will receive 100% of their claims.  

Mr. Venkat Chary, the chairman of the FTIL, too had reiterated that “around 94% of trading clients’ claims can be immediately addressed in part or full measure by Rs.1, 000 crore payment.” 

Eleven defaulters have admitted liability of Rs 2,000 crore and high court has issued decrees for Rs 513 crore.

If all parties contribute and come forward to resolve the NSEL issue, then it will be one less problem for the government to solve.  

Quoting futuristic vision of FTIL – on board expansion

FTIL Board reaffirms its confidence in Management Team to execute on its Founders’ Vision 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 next 10 years. In the series of events, ODIN to be spun out as separate subsidiary or SBU to attract majority strategic partner / investor was the highlight.

As the new directors were welcomed, the experts in FTIL alluded that the vision 2025 for FTIL was futuristic and pragmatic. The occasion of the expansion of FTIL board got stimulating citations from the leaders of FTIL, as well as the new directors.

Mr Venkat Chary, IAS (Retd), ex-Chairman FMC and Chairman FTIL, welcomed the new Directors on the Board, saying - "Both Berjis and Anil are world class industry seasoned professionals known for being highly independent and vocal about corporate governance and protecting minority shareholder interest on the companies where they serve on the Board, and FTIL will certainly benefit from their experience as the company transforms itself under leadership of its Founder and MD, Jignesh Shah, in to technology partner to build and power new generation digital enterprises that will emerge over next 10 years as part of his vision Digital India @ 2025. Prashant Desai is a thorough industry professional and has played key role in IR and M&A over past year at FTIL."

Mr Jignesh Shah Founder and MD of FTIL also congratulated the new Board of Directors and said, "I have no doubt that the new Board coupled with FTIL’s technology, scale and execution capabilities can significantly contribute in creating & powering at least 100 new digital leaders in 10 key sectors over next 10 years. These new Digital Disruptors will be the bellwether of inclusive development and growth besides creating a domino effect in the ecosystem that will be breeding ground to more new entrepreneurs, start-up’s and job creation and will become the showcase of Digital India by 2025."

Mr Berjis Desai said, “FTIL is a global leader in building robust, enterprise class, scalable and cost efficient technology for developing but fast growing markets like India, SE Asia, Middle East and Africa and I’m excited to be part of its Board as the company embarks on its journey to shift orbit and become preferred technology partner for India’s next emerging tech-enabled giants in key vertical sectors, in line with its Founder’s vision of Digital India @ 2025."

Mr Anil Singhvi said, "I believe, FTIL with its world class Talent, Technology, Capital, Infrastructure and Leadership is ideally poised to become the obvious choice as partner for entrepreneurs and organizations, who would rather outsource the services and conserve the resources to scale up their business. I’m excited about the journey ahead and optimist about FTIL Management team’s ability to execute on Founder’s Vision of Digital India @ 2025".

Mr Prashant Desai added to their view saying, "Despite the recent challenges, there is renewed positive energy within all corners of FTIL. The team is confident of its ability and is confident that FT 3.0 will emerge as a unique Indian IT company focused on ‘technology + innovation+ enterprise’ DNA of FTIL and in the process create significant shareholder value. I am very happy to be on the Board."

Subsuming the views and quotations, the metamorphosis of FTIL with the latest FT 3.0 technology complemented their views and space-age vision for FTIL, to enthuse stakeholders with realistic growth that is expected to be exponential in the coming times. 

New rollers of developments at FTIL

The week gone by has brought in new waves of optimism for FTIL. FTIL turned new leaves with a distinct step forward – the expansion of FTIL Board, having inducted industry leaders commanding colossal wealth of experience in the business spectrum. Among the inducted directors were Mr.Anil Singhvi, Mr. Berjis Desai and Mr. Prashant Desai. The former MD and CEO of Ambuja Cement, Anil Singhvi will be part of the Board of Directors along with the founder of the law firm – J Sagar Associates, Mr. Berjis Desai, as non-independent and non-executive directors. The investor relation expert, Mr. Prashant Desai will be on FTIL Board as an executive director.  

Empowering the board with more able hands to ripple FTIL’s progression was, evidently, the core objective. All three of them have hailed as exceedingly successful leaders in their fields of functionality. Their credentials have led numerous organisations to the pinnacle of accomplishments.

Bergis Desai – a law graduate from the Mumbai University and a post-graduate in law from Cambridge University, UK, was the managing partner of J. Sagar Associates, a national law firm, with the strength of over 300 lawyers, since April 2003. He specializes in financial and international business laws and international commercial arbitration. He is also a director of leading companies including The Great Eastern Shipping Company Ltd., Praj Industries Ltd., Emcure Pharmaceuticals Ltd., Edelweiss Financial Services Ltd. and Adani Enterprises Ltd.

Mr. Anil Singhvi, a chartered accountant, is the Chairman of Ican Investments Advisors Pvt. Ltd., with over 30 years of experience in corporate sector, which constitutes 22 years of extensive experience having worked with Ambuja Cements Ltd. where he excelled to the high echelon of MD & CEO. By worthy organic and inorganic strategies, the company grew from less than one million to 20 million tonnes, wherein he played a crucial role in the sale of Ambuja & ACC to Holcim, with a transaction value of over $ 2 billion. His approach was multidimensional, having conceptualised and advised merger of Enam with Axis, a deal that involved about US $ 500 million, and having founded IIAS (Institutional Investor Advisory Services India Ltd.), proxy advisory company for Institutional Investors.

It was a ground-breaking determination for refining corporate governance and accountability of the corporates. IIAS covers over 300 large Indian corporates and advises Investors on the issues of corporate governance and voting. Apart from being Corporate & PE Advisor, he is also on the board of various companies viz. Hindustan Construction Co. Ltd., Capital First Ltd., Subex Ltd, Greatship (India) Ltd., Lavasa Corporation Ltd.

Mr. Prashant Desai commands 20 years of valuable experience, which constitutes 10 years in investor’s relation. He is an associate chartered accountant and ranked 4^th, whilst graduating in cost & work accountant. He founded Seagull IR Solutions Pvt. Ltd., which happens to be one of India’s leading investor relations companies. It has represented numerous companies viz. Financial Technologies (India) Ltd. (FTIL), Pipavav Defense, Phoenix Mills, Talwalkars. Provogue, Prozone CSC, Everstone, Dhunseri Petrochem, DQ Entertainment, Supreme Infrastructure and many more. Before this stint, he headed IR

& Investments at Future Group (Pantaloons Retail, Future Capital Holdings & Future Ventures, Mumbai). He was also head of research at Rare Enterprises, a Rakesh Jhunjhunwala partnership firm, in Mumbai. He was also a board member in Pantaloons, Talwalkars, Future Staples, Future E-Commerce, Pan-India Foods and Industree Crafts. He was President, Mergers & Acquisition and investor Relations at FTIL, since December 2012. He also represents FTIL on the boards of Dubai Gold & Commodity Exchange, Bourse Africa Ltd., Mauritius and Bahrain Financial Exchange, Bahrain.

The new inclusions to the FTIL Board were welcomed by all in FTIL, particularly, by the founder and MD of FTIL – Mr. Jignesh Shah and Mr. Venkat Chary, IAS (Retd), ex-Chairman FMC and Chairman FTIL.