New Delhi: The Ministry of Corporate Affairs is looking to ascertain whether Jignesh Shah-led Financial Technologies violated laws, especially with respect to carrying out its duties as a holding company.
Financial Technologies (India) Ltd (FTIL) is the flagship company of Shah Group, whose firm National Spot Exchange Ltd (NSEL) is grappling with a Rs 5,600-crore payment crisis.
Besides these entities, the continuing crisis has also sparked off a series of regulatory interventions that have thrown spotlight on the group's various other ventures, including MCX, MCX-SX and IEX.
According to sources, the Ministry is looking to ascertain whether FTIL as a holding company mismanaged the affairs of the subsidiary.
The Ministry has found “gross violations” by FTIL board on corporate governance matters, among others.
Although the Ministry has completed its report on FTIL, it has sought the views of the Law Ministry and other agencies before taking a final call.
Earlier this month, the capital market regulator SEBI had ruled that FTIL is not a “fit and proper person to acquire or hold any equity share or any instrument that provides for entitlement for equity shares or rights over equity shares at any future date, in a recognised stock exchange or clearing corporation.”
The order would be applicable for both direct and indirect holdings of FTIL in stock exchanges and clearing corporations.