The MCA issued the draft order of NSEL-FTIL merger on October 21, 2014. This was order was based on the recommendations made by the Forward Markets Commission (FMC). The constitutional validity of Section 396 of the Companies Act, 1956, was challenged and, in turn, the legality of the draft order was challenged by FTIL before the Bombay High Court.
If the merger is being forced on FTIL to ensure recovery for trading clients, then MCA needs to first consider that Rs.542 crore has already been paid off. Additionally, NSEL has made substantial recovery efforts by filing over 150 cases against defaulters, obtaining Rs.1,233crore of decrees, and Rs. 3,428.86 crore of injunctions.
Hope for Justice
Initiatives like encouraging the investments and FDI into our country and rolling back EPF have boosted immense faith among the entrepreneur fraternity into our government. However, instances like the Vodafone tax issue and ban on Maggi raised questions towards corporate governance in the nation. A favorable and thoughtful decision on the forced merger of NSEL-FTIL is a great opportunity for the government to boost and encourage entrepreneur spirit amongst young and dynamic business minds.
manvsfinance 