DOES FORCED MERGER

OF NSEL-FTIL TAKE INTO

ACCOUNT PUBLIC

INTEREST OF ONLY

TRADING CLIENTS?

Catalogue

Is Public Interest defined under the Section 396

of the Companies Act?

Public interest disregarded

When Can Two Companies Merge?

Trading Clients Are Not Investors

Shareholders Interest Is Crucial

Is Public Interest defined under the

Section 396 of the Companies Act?

While determining “public interest”, interest of all the

concerned should be taken into account in a transparent

manner

Public Interest is not defined under the Section 396 of the

Companies Act, 1956 (Act)

It should not appeal/safeguard only to certain class of

public to the prejudice of others

Public interest disregarded

Forced Merger completely disregards the interest of more

than 63,000 public shareholders of FTIL

1000+ employees of FTIL, lenders, vendors & other

stakeholders of FTIL are ignored to allegedly protect the

interest of 781 HNI, sophisticated Trading Clients, who

account for 66% of the total outstanding

When Can Two Companies

Merge?

Under the Companies Act, the Central Government can

merge two companies only if such merger is "essential in the

public interest“

The interest of the 13,000 clients of the brokers who traded

on NSEL platform for higher returns cannot be termed as

“public interest”

Bombay High Court, in its order dated 22 August 2014 has

questioned whether these Trading Clients are ‘genuine

investors’

Trading Clients Are Not

Investors

Trading clients are neither creditors of NSEL

nor did they invest in FDs/Debentures in NSEL

No “interest” was paid to Trading Clients by

NSEL and hence they are not investors as

they wrongly call themselves

Shareholders Interest Is Crucial

The interests of more than 63,000+ public shareholders of

FTIL are equally important and construe “public interest”

The Draft Order of MCA, dated 21.10.2014, proposing

merger of NSEL with FTIL under the pretext of public interest

is not legally tenable