Peel off black paint, let moonlight emerge
Market cognoscenti felt it was a bold move by 63 Moons to take the battle right into the heart of the rivals’ den and raising some very valid points.
The NCLAT judgement disallowing the government from superseding the board of 63 Moons Technologies is the latest in the series of judgements helping the Mumbaibased company peel off the black taint once heaped on it by the P. Chidambaram cabal of politicians and officials operating out of Mumbai and New Delhi.
The proposal to supersede the board was made by the Ministry of Corporate Affairs (MCA). Now it stands rejected. 63 Moons has 14 directors, including four former IAS Secretaries, one former Supreme Court judge, and one former High Court judge. S. Rajendran, MD & CEO, 63 Moons said, “The order has given a clean chit to the current board of 63 Moons, absolving it of any alleged misconduct or wrongdoing against the interest of its shareholders. Strangely, in the case of Jignesh Shah, Section 388B was applied on the basis of material beyond the original petition filed by MCA in 2015. Of the three directors of 63 Moons, only Jignesh Shah was on the NSEL board (as non-executive director) and proceedings under Section 397 have not been initiated against NSEL nor have proceedings under Section 388B been upheld against any other directors of NSEL, including other directors of 63 Moons, who were also on the NSEL board. This complete contradiction is one of the many unexplained and unsubstantiated inconsistencies in the order. We are examining the operational part of the judgement.”
Sadly, contradictions have been a part of 63 Moons ever since it got embroiled in the NSEL payment crisis that erupted way back in 2013. Jignesh Shah and his men vociferously denied the charges, but still the top brass of 63 Moons (earlier Financial Technologies) were hauled over the coals. But now, slowly, yet steadily, those charges are falling off like ninepins. Market observers said the latest judgement should be seen in the light of a host of decisions taken by courts across India. In each of this decision, the gigantic story of fraud heaped on National Stock Exchange Limited is being peeled off.
Among those judgements which made many sit up and take notice was the one taken by the country’s apex court. In May 2019, the Supreme Court set aside a threeyear-old government order to merge 63 Moons with NSEL. The merger order did not satisfy the criteria of “public interest” cited by the government for its decision, the court ruled after hearing a batch of petitions filed by 63 Moons and founder Shah challenging a Bombay High Court order upholding the merger. What was interesting is that the order came almost six years after the payment crisis surfaced on 31 July 2013, when NSEL, a 99.99% subsidiary of FTIL, defaulted on nearly Rs 5,600 crore payments to its 13,000 investors.
The decision of the Supreme Court gave hope to 63 Moons, which scaled up the battle against those it believed actually perpetuated the NSEL payment crisis.
In July 2019, the Bombay High Court ordered former Finance Minister P. Chidambaram and two IAS officers to submit a written statement in response to a Rs 10,000-crore defamation suit slapped by 63 Moons in the NSEL payment crisis. The two IAS officers were Ramesh Abhishek, former chairman of the erstwhile commodities market regulator Forward Markets Commission and K.P. Krishnan, former officer in the finance ministry when Chidambaram was the FM. While Chidambaram is alleged to have framed policies supporting National Stock Exchange (NSE), the two officers were blamed for having helped create undue regulations beyond their jurisdiction to slay competition and finish the business of FTIL, which also promoted NSEL.
Market cognoscenti felt it was a bold move by 63 Moons to take the battle right into the heart of the rivals’ den and raising some very valid points.
The following month, in August 2019, the Bombay High Court ruled that the NSEL was not a financial establishment and hence, the attachment of assets of its promoter, 63 Moons, under the Maharashtra Protection of Interests of Depositors in Financial Establishments (MPID) Act was not valid. A division bench of Justices Ranjit More and Bharati Dangre set aside seven notifications issued by the Maharashtra government last year for attachment of the assets of 63 Moons. The attachment was made as part of the Mumbai police’s probe into the NSEL payment crisis. What was significant in the judgement was the fact that the bench noted that those trading on the NSEL platform did not invest with the NSEL in the form of its fixed deposits, equity or debentures, but traded commodities. “The NSEL has always voiced its stand by stating that it is not a financial establishment and in response to the notices issued to it, the NSEL pointed towards defaulters who were responsible for the loss to the investors and the said contention of the NSEL was found to be substantiated by audit reports,” the order said.
Thanks to the spate of these judgements, many in both Mumbai and Delhi are able to see the handiwork of manipulative politicians and their business associates who tried their best to hit Shah, a promoter who once created some of India’s most successful exchanges.
Top brokers in Mumbai, who refuse to speak on record, say that Shah, chairman emeritus of 63 Moons, the rechristened version of the Financial Technologies—the erstwhile parent holding firm for all the exchanges founded by him— has emerged as a phoenix, a mythical bird with fiery plumage that lives up to 100 years. The re-emergence factor is the hallmark of the phoenix, which, near the end of its life, settles into its nest of twigs which then burns ferociously, reducing bird and nest to ashes. And from those ashes, a fledgling phoenix rises—renewed and reborn. Shah, who began his entrepreneurial journey in his 20s and went on to set up 14 exchanges across six continents in a span of 10 years, had to exit all exchange-related businesses under regulatory orders in the aftermath of the NSEL crisis. NSEL was one of his smallest ventures.
Judgements after judgements are opening up the bank accounts and assets of 63 Moons Technologies. More importantly, the big issue of corruption has not stuck on his sleeves. Court orders are absolving him of all the charges one after another as no agency could prove even a single paisa of wrongdoing on his part, nor on the part of his companies.
The rise of Shah despite the efforts of the well-connected PC Network to finish off his businesses is good news for the markets where you rarely find someone offering hope, especially in the current scenario. It has shown that truth and justice can still prevail. His rivals, the list ranging from P. Chidambaram and his band of trusted bureaucrats, are now facing the heat. 63 Moons has taken the battle right into the heart of Delhi, where Chidambaram spent some months in maximum security Tihar Jail for charges involving him and his son, Karti.
Life has caught up with both. Jignesh Shah is finally seeing some good karma, P. Chidambaram is showered with bad karma, and several friends have deserted him. Even letters to the jail by his son Karti did not offer any solace to the former FM. On the other hand, Shah, rebooted, wants to set up digital ecosystems to help the social sector raise cash and for products to promote water conservation, both high also on the agenda of the current government. Very few remember how some of the most successful stock exchanges India created were destroyed through vicious political manipulation acting through accomplices in the bureaucracy.