NCLAT sets asides govt plea to supersede 63 Moons Technologies board

The National Company Law Appellate Tribunal on Thursday set aside the government's plea to supersede the board of 63 Moons Technologies (formerly known as Financial Technologies (India) Limited). An NCLAT bench headed by Chairperson Justice S J Mukhopadhaya, however, upheld the directions of the Chennai bench of the National Company Law Tribunal (NCLT) to appoint three government nominees on the board of 63 Moons.

The appellate tribunal also dismissed the plea of the company's three directors, which include Jignesh Shah and Divang Narela, challenging their disqualification. Earlier, on June 4, 2018, the NCLT had set aside the Centre's plea to supersede 63 Moons.

The NCLT has, instead, allowed the government to nominate three directors to the board of 63 Moons Technologies to take care of the interest of all stakeholders as well as protect the company's investments in its subsidiaries. It had also barred Jignesh Shah and nine others from holding directorship in 63 Moons.

"... we uphold the impugned order dated June 4, 2018, with regard to Jignesh Prakash Shah, Dewang Sunderraj Neralla, Manjay Prakash Shah and appointment of Government nominee not more than three Directors to the board of '63 Moons Technologies Ltd' to take care of the interest of all stakeholders and also to protect the interest of the investment of the '63 Moons Technologies Limited' in its subsidiaries,"said NCLAT. However, part of the NCLT order by which Devendra Kumar Agrawal, Berjis Minoo Desai, Anil Chandanmal Singhvi, Nisha Dutt, Sunil Hasmukhlal Shah, Prashant Desai and Jigish Shantilal were declared as "not fit and proper persons to hold the office as Directors or any other office connected with the conduct and management of '63 Moons Technologies" and 'National Spot Exchange Limited' was set aside by NCLAT.

The appellate tribunal said that 63 Moons Technologies and Jignesh Prakash Shah and others, who were functioning against one or other post in '63 Moons Technologies "cannot say that they had no knowledge about 'National Spot Exchange Limited' who has 100 per cent shareholding in NSEL." "The report of the forensic audit conducted on September 21, 2013 shows the damning facts and figures as to the real operations of National Spot Exchange Limited'. It shows that they are not a commodity exchange, but an illegal financing scheme, and that no commodities were really in stock," said NCLAT. The Rs 5,600-crore National Spot Exchange Ltd (NSEL) payment scam came to light in 2013.

The government had moved to the NCLT to take over the board of the company under section 397 and 398 of the Companies Act after Rs 5,600-crore NSEL scam came out. NSEL is a subsidiary of 63 Moons. Commenting on the development, 63 Moons MD & CEO S Rajendran said, "We are extremely happy to note that the NCLAT has rejected MCA's prayer to supersede the board of 63 Moons in connection with the payment default crisis that occurred at one of our subsidiaries, National Spot Exchange Ltd (NSEL) in 2013.

"The order has also given a clean chit to the current Board of 63 Moons of any alleged misconduct or wrongdoing against the interest of its shareholders," he added..

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)