Within hours of Financial Technologies (FTIL) announcing its stake sale in its subsidiary, Singapore Mercantile Exchange, to a global exchange for $150 million (Rs 900 crore), the NSEL Investor Forum, a representative body of 13,000 affected investors formed after the Rs 5,600 crore payment crisis in the spot exchange NSEL (wholly-owned by FTIL), promoted by Jignesh Shah, approached Sebi objecting to FTIL’s plan to retire foreign debt using the sale proceeds.
FTIL on Monday told exchanges that its wholly-owned subsidiary, Financial Technologies Singapore, agreed to sell 100 per cent stake in Singapore Mercantile Exchange (SMX) to ICE Singapore Holdings, an entity owned by Intercontinental Exchange Group, for $150 million. This includes SMX Clearing Corporation (SMXCC), a wholly owned subsidiary of SMX and the clearinghouse for all SMX trades.
Arun Dalmia, secretary of the NSEL Investor Forum, raised questions over the intentions of the firm. “See how honest the promoters of FTIL are. They are in a hurry to prepay debt raised outside India via foreign currency loans and external commercial borrowings which are still to expire, as they are due in 2014 and 2015. But what about paying NSEL investors’ dues?” Dalmia asked while speaking to Financial Chronicle.
He later wrote to the FTIL board and sent copies of it to the Forward Market Commission, Sebi, the enforcement directorate and other authorities. The letter objected to FTIL’s proposal to use the money from sale for retiring foreign debt.
“We will be compelled to take legal action, including criminal action, against you if you proceed to divert the proceeds from sale of any assets towards repayment of any loan which is not even due and outstanding in priority over settlement of your obligations towards the (affected) investors,” the forum letter said.
FTIL on Monday told exchanges that its wholly-owned subsidiary, Financial Technologies Singapore, agreed to sell 100 per cent stake in Singapore Mercantile Exchange (SMX) to ICE Singapore Holdings, an entity owned by Intercontinental Exchange Group, for $150 million. This includes SMX Clearing Corporation (SMXCC), a wholly owned subsidiary of SMX and the clearinghouse for all SMX trades.
Arun Dalmia, secretary of the NSEL Investor Forum, raised questions over the intentions of the firm. “See how honest the promoters of FTIL are. They are in a hurry to prepay debt raised outside India via foreign currency loans and external commercial borrowings which are still to expire, as they are due in 2014 and 2015. But what about paying NSEL investors’ dues?” Dalmia asked while speaking to Financial Chronicle.
He later wrote to the FTIL board and sent copies of it to the Forward Market Commission, Sebi, the enforcement directorate and other authorities. The letter objected to FTIL’s proposal to use the money from sale for retiring foreign debt.
“We will be compelled to take legal action, including criminal action, against you if you proceed to divert the proceeds from sale of any assets towards repayment of any loan which is not even due and outstanding in priority over settlement of your obligations towards the (affected) investors,” the forum letter said.
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