The Telegraph
Thursday , July 10 , 2014
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Tribunal trashes FTIL plea

Mumbai, July 9: The Securities Appellate Tribunal (SAT) today dismissed a plea by Financial Technologies (India) Ltd to annul a Sebi order, which said the Jignesh Shah-company was unfit to hold stakes in bourses.

FTIL will now have to divest its shares in bourses that include MCX-SX within four weeks.

The tribunal ruled that orders passed by one regulator (Forward Markets Commission in this case) would apply to others, too.

“An order passed by one regulator would have to de facto apply to other regulators and not following this principle would defeat the spirit of regulation,” presiding officer J.P. Devdhar said.

He said that the moot question was if the orders of one regulator had a bearing on others.

In the tribunal’s eyes, the ruling in favour of Sebi was reinforced by the fact that the trades regulated by the commodity markets regulator were similar to those handled by the market regulator.

Sebi’s order came after a similar directive by the FMC on December 17, 2013 following a Rs 5,600-crore payment scam in National Spot Exchange Ltd (NSEL). FTIL owned 99.99 per cent of NSEL.

Devdhar said as the 90-day window granted to FTIL by Sebi for divesting its stakes had already expired, the company could be given another four weeks.

FTIL owns 26 per cent in commodities bourse MCX and has a 70 per cent stake in MCX-SX and MCX-SX Clearing Corporation. Its MCX-SX ownership is at 5 per cent through equity and the rest through convertible warrants.