FTIL board to reconvene on May 2 to review divestment in MCX

Tags: Stock Market

Receives non-binding bids from nine prospective global and Indian investors for 24 pc MCX stake

Financial Technologies India Ltd. (FTIL) board on Friday decided to reconvene on May 2 to review the divestment process of its 24 per cent holding in MCX. This is in light of the bidders seeking extension to put in their binding bids subsequent to MCX board on Saturday (April 26) for deliberating and deciding the further course of action on the Special Audit Report conducted by PwC.

FTIL had informed its shareholders vide stock exchange notice dated April 11, 2014 that the company’s restructuring committee has received non-binding bids from nine prospective marque Indian and global investors for the proposed divestment of up to 24 per cent equity in MCX. FTIL had informed that it would finalize the bids by April 25, 2014 after the Board of Directors of FTIL selects the final bidder(s). This was subject to cooperation from MCX for customary due diligence to enable the proposed sale within the defined timelines. The divestment for 24 per cent stake in MCX was without prejudice to FTIL’s rights pending before the court.

However, some of the serious bidders have communicated to the Forward Markets Commission (FMC) and to the FTIL appointed merchant banker – J M Financial Institutional Securities Ltd. that there has been lack of cooperation by MCX in providing critical information, which is holding back any of these bidders to execute a binding share purchase agreement.

“FTIL would like to point out that at all the stages it has been transparent and has set up a standard procedure for all the bidders for this divestment process. FTIL has appointed renowned merchant banker J M Financial Institutional Securities Ltd. and constituted a committee comprising eminent personalities to oversee the entire process. FTIL has disclosed all material information about MCX, which is in public domain. Any information beyond this has to be shared by MCX on which FTIL has sought cooperation from the company to enable the divestment be completed within the defined timeline of April 25, 2014. Considering the concern raised by some of the potential investors, FTIL expects MCX to share the information sought by these investors to complete the divestment as early as possible,” FTIL said in a press release.

“At the outset, FTIL understands that PwC has conducted a special audit on MCX and has submitted a detailed report to MCX and FMC. FTIL had formally sought the draft report so that the company can share its views on some of the purported allegations against FTIL that can be aptly clarified. Neither MCX nor PwC has shared the report or sought views from FTIL,” it said.

“We would like to point out that all transactions between MCX and FTIL have been clearly disclosed in MCX’s statutory audit conducted by leading auditors for the past 10 years. Also, all transaction between the two companies was clearly based on commercial agreements which were disclosed in detail in MCX’s final red herring prospectus which was filed in 2012, based on which the market regulator allowed MCX’s IPO in March 2012.

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