So I was reading this book on Jignesh Shah, which was recently launched, that captured his creations and innovations, apart from the injustice done to him.
For all those who aren’t aware – Jignesh Shah was a pioneer who developed the commodities and futures industry in India and took it to the world. But while his ventures were making India proud, he was crushed with all force by the then ruling government with unreasonable orders and verdicts.
Titled – The Target Book, by ShantanuGuha Ray, this book, which I request all of you to read brings to light how a true ‘Made in India’ story was destroyed by our very own politicians and bureaucrats. One such order was a merger of two of his companies – NSEL & FTIL.
While considering the pros and cons of this forced merger, it is evident that the merger will destroy the concept of “limited liability”. It may also lead to global and local investors losing confidence in investing, given that FTIL has FDI and FII investments. It will further set a precedent to an array of PILs seeking a merger of companies facing financial problems with their solvent parent companies.
The forced merger will also have an adverse impact on FTIL’s market capitalization. It may erode its net-worth by buckling the unproven and sub-judice liabilities of more than Rs.5,000 crore of NSEL onto FTIL. This will directly harm thousands of FTIL shareholders along with hundreds of its employees, creditors, vendors and other stakeholders, which is against the spirit and purpose of Section 396. It can hardly be said that Section 396 was meant to fasten third-party unproven liabilities on a healthy company with a view to adversely affect the stakeholders of such healthy company, its creditors, and employees.
While the saying – “All is Well, That Ends Well”, holds true here, we too hope for an unbiased and beneficial resort to the NSEL–FTIL crisis, a resort that would be globally favorable and fortunate for other corporate houses too.