Mumbai: Shares of Financial Technologies slumped 20 percent to hit its lowest trading permissible limit for the day after the government decided to merge crisis-ridden National Spot Exchange Ltd (NSEL) with holding group FTIL.
Following this, shares of FTIL went into a tailspin and slumped 20 percent to Rs 169.65 -- its lowest trading permissible limit for the day -- on the BSE. The stock had opened the day on a positive note but as soon as the merger news came in investors pressed the selling button.
At the NSE, the stock nosedived 19.99 percent to hit its lower circuit limit of Rs 169.70.
NSEL, which has been facing payment crisis, is promoted by Jignesh Shah-led Financial Technologies (India) Ltd.
Issuing a draft order for the proposed merger, the government today said the move has been decided upon in "public interest".
"The central government has decided on the merger of NSEL with its holding company FTIL, in public interest under Section 396 of the Companies Act, 1956," the Corporate Affairs Ministry said in a statement.
"In the face of a fraud of such a magnitude involving settlement crises of Rs 5,600 crore owed to over 13,000 investors on the trading platforms of NSEL, FTIL cannot seek to take refuge behind the corporate so as to unjustifiably isolate itself from the fraudulent actions that took place at NSEL resulting in such a huge payment crisis," the order said.
