Financial Technologies Group

Financial Technologies (India) Limited
Public company
Traded as BSE: FINTECH
NSE: FINANTECH
Industry Computer services on finance/banking[1]
Founded 1988
Headquarters Chennai, India[2]
Key people
S Rajendran, Managing Director and CEO, Venkat Chary, Chairman [3]
Products Software
Revenue 3.8 million (US$59,000) (as of 2016)[4]
Number of employees
857 as of December 2016 [2]
Website www.ftindia.com

Financial Technologies (India) Limited (FTIL) is an Indian financial services company, formed in 1988. It is promoted by the Financial Technologies Group. Jignesh Shah is founder of the FT Group which went on to democratize and revolutionize commodity exchanges in India, Singapore, Dubai and Africa.[5] The group offers technology IP (Intellectual Property) to create and trade on financial markets, across asset classes including equities, commodities, currencies and bonds among others.[2]

Evolution

The company commenced operations in 1988 starting off with the development of technology products that served to connect the financial markets. Financial Technologies Group was founded by Jignesh Shah.[6] It had its first IPO in 1995. The company's foray into the exchange business was established when it introduced India's first derivatives trading platform. It went on to establishing similar exchanges connecting fast growing economies.

About Jignesh Shah

Jignesh Shah is an electrical engineer turned entrepreneur whose efforts are considered as pioneer of Make in India campaign. While working at Bombay Stock Exchange, Shah traveled extensively to learn how stock exchanges work around the world. Post that he launched Financial Technologies Group.

Another one of Jignesh Shah's achievements as a contribution to nation's business growth is the Multi Commodity Exchange (MCX) which has evolved into a giant trading platform.[7] Lately, Shah has been working towards promoting innovative technology and has spearheaded the launch of JS Innovations Labs which has been envisioned to compete with several world renowned labs. Shah is currently Chairman Emeritus of Financial Technologies Group he resigned from FTIL Managing Director on November 20, 2014.

Products

The group has three business divisions comprising ten Exchange Ventures, six Ecosystem Ventures, and multiple technology offerings. It operates one of the world's network of exchanges connecting financial markets of fast-growing economies of Africa, Middle East, India and South East Asia.

NSEL case

FTIL was held not 'fit and proper' by the forward market commission and its role in its 99.999% subsidiary NSEL (National Spot Exchange Ltd) was questioned. The union of India even moved a petition in Company law Board to replace the directors of FTIL with government nominees. The Central Bureau of Investigation (CBI) has charged 20 entities and some of their officials for cheating state-owned commodities trading firms PEC Ltd and MMTC Ltd in connection with the Rs5,600 crore payments fraud that surfaced in 2013 at the National Spot Exchange Ltd (NSEL).

The entities include NSEL, its parent Financial Technologies India Ltd (FTIL), PD Agro Processors Ltd, Dunar Foods Ltd and Mohan India Ltd.

CBI, in a chargesheet filed with a special court in Mumbai in December, accused Jignesh Shah, former chairman of FTIL, of cheating and criminal conspiracy, and breaching the prevention of corruption act. Shah and FTIL, now known as 63 Moons Technologies Ltd, denied these charges.

The December chargesheet made CBI the third agency to file a chargesheet in the NSEL case. The Economic Offences Wing of Mumbai police filed a chargesheet in 2014, and the Enforcement Directorate in 2015.

According to the 150-page chargesheet, CBI has found a fund trail that led to losses of Rs120 crore for PEC and Rs105 crore for MMTC.

CBI had first registered a first information report in the case in February 2014, alleging that a “conspiracy was hatched” by the accused to cheat PEC and siphon off its funds by floating “accommodative and fraudulent paired contracts”.

Paired contracts entail investors, through brokers, buying a spot contract and selling a futures one for the same commodity, and pocketing the difference.

Paired contracts violate the Forward Contracts Regulation Act (FCRA) as they are financial transactions. NSEL was allowed to deal only in spot delivery contracts to be exempt from FCRA.

In the chargesheet, CBI has alleged that FTIL was the major beneficiary of the revenue earned by NSEL and that paired contracts were the major source of income for the commodities bourse.

“All the minutes of the board meetings of NSEL were vetted and approved by FTIL before issuance,” said the CBI chargesheet.

NSEL was a separate company with its own board of directors. It said NSEL became a “material subsidiary” of 63 Moons only from April 2011.

“The duly approved board minutes of any such material subsidiaries for all listed companies for compliance purpose are required to be placed on a ‘post-facto’ - ‘for your information’ basis before the board of the parent company. In any event, none of these board minutes of NSEL raised any red flags,” the email said.

FTIL also said that it did not derive any benefits as NSEL never declared any dividends or issued bonus shares.

The CBI chargesheet highlighted that FTIL received a sum of Rs90.69 crore from NSEL as software maintenance charges during 2011-13.

The specific allegations against Shah pertain to his presence in board meetings where launch of contracts was approved.

The CBI also alleged that Shah was also named as a key management personnel (KMP) of NSEL during 2008-12 when the concept of paired contracts was introduced.

The chargesheet said that Shah had also made a presentation to the Forward Markets Commission (FMC) and consumer affairs ministry on adequacy of stocks a mere 20 days before the settlement crisis erupted.

“Shah has informed that he has never met or interacted with any officials of PEC or MMTC, therefore the question of connivance does not arise. Shah was non-executive vice-chairman of NSEL. He never received any compensation nor any salary and not even the sitting fees from NSEL,”

To be sure, CBI also mentions that Shah was briefed by Anjani Sinha, former CEO of NSEL, before the presentation was made. According to CBI, Sinha was responsible for creating paired contracts—a “financing mechanism”. Sinha also devised a system which encouraged parties to engage in financial transactions without underlying stocks.

“He was the sole approving authority for all the limits granted to the defaulters PD Agro Processors and Mohan India and others who subsequently siphoned off the huge public money without having sufficient collateral/ commodities,” CBI said in the charge sheet.

[8]http://www.livemint.com/Companies/tqpCgjzO75ndjk45SYnm3I/NSEL-scam-CBI-accuses-Jignesh-Shah-of-cheating-criminal-co.html

Subsidiaries

Departments

Industries served By ESG are Banking, Financial Services, Insurance, Telecom, Software Companies, Corporate, Government, Public Sector

FTIL-SMX Stake

In the year 2013, shares of Financial Technologies (India) Ltd settled 2% higher in-line with a sluggish stock market after the company announced sale of its Singapore-based bourse Singapore Mercantile Exchange (SMX) for USD 150 million (Rs 931 crore) to InterContinentalExchange.[11]

See also

References

  1. Type
  2. 1 2 3 Investor FAQ
  3. Board of Directors. Archived 16 August 2012 at the Wayback Machine.
  4. "BSE Plus". Bseindia.com. Retrieved 25 September 2010.
  5. "Jignesh Shah named 'Young Global Leader'". The Economic Times. January 18, 2007. Retrieved August 13, 2016.
  6. "Financial Tech to set up exchange in Mauritius". Business Standard. 30 November 2006. Retrieved 29 April 2009.
  7. Hemant Sharma (March 22, 2016). "Jignesh Shah — The unsung pillar we need to know". Retrieved August 13, 2016 via Medium.com.
  8. "atom - mobile payments application". Archived 24 July 2009 at the Wayback Machine.
  9. "About TickerPlant". TickerPlant Limited. Archived from the original on 2016-08-08. Retrieved August 13, 2016.
  10. "FTIL shares settle 2% higher on deal to sell SMX stake". Economic Times. 19 November 2013.
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