The Chennai bench of the National Company Law Tribunal (NCLT) has declared Jignesh Shah and nine other directors ‘not fit and proper’ to be directors of any company, including 63 Moons (formerly known as Financial Technologies India Ltd) and its subsidiary National Spot Exchange Ltd (NSEL).
The order comes in response to a petition filed by the Union government in 2015, for superseding the board of 63 Moons for their alleged role in the ₹5,600 crore NSEL scam in 2013, which resulted in suspension of trading from the exchange.
According to the order, the 10 named persons cannot hold the directorship in any other company. The order also allows the government to nominate up to three directors to the board of 63 Moons to take care of the interest of all stakeholders and also to protect the interest of investment of 63 Moons in its subsidiaries.
The order was passed by the coram consisting of by CH. Mohd. Sharief Tariq, member (Judicial) and S. Vijayaraghavan, member (Technical), NCLT, Chennai.
“Shah and others have conducted themselves in a manner prejudicial to the public interest and the interests of the respondent companies (63 Moons, NSEL, MCX),” the coram said.
“As has been discussed, the actions of the respondents (Shah, the company and others) have shaken public confidence in the Indian Commodity markets. Their failure to exercise due diligence has resulted in the suspension of trade in NSEL and has had/will have adverse effects on the members and other stakeholders of the Financial Technologies also,” it added.
NCLT, however, provided relief to respondents who joined 63 Moons after trading was suspended on NSEL, citing that no allegations have been made against them.
“We are happy that NCLT has completely exonerated the present Board of 63 Moons....of all the baseless allegations of oppression and mismanagement,” 63 Moons said in a statement.
“In respect of past directors and new directors’ addition, while we are still analyzing the Order, on a quick review, it appears to be full of factual inaccuracies and inherent contradictions,” the company statement added.
The company said it is examining all legal options.
