Electricity watchdog CERC has given Financial Technologies time till January 4 to comply with its directive to complete sale of its entire stake in Indian Energy Exchange.A few weeks ago Financial Technologies (India) Ltd had inked a deal to offload its entire 25.64 per cent shareholding in IEX for more than Rs 576 crore. The completion of the deal subject to regulatory and other approvals.
In its latest order, the Central Electricity Regulatory Commission (CERC) said that FTIL has been pursuing the divestment process in compliance with its order.
"FTIL has requested not to take any precipitate action which will hamper the divestment and adversely affect the economic value of the company and interest of its shareholders and other stakeholders," the order said.
FTIL's stake in the exchange is to be completed within 30 days from the date of the agreement unless extended by all the parties.
"In our view, a period of 60 days from the date of agreement is considered sufficient to complete the process. Accordingly we allow time till January 4, 2015 for completion of the divestment process," the CERC order said.
IEX has to file the final compliance report on or before January 14.
As per the share purchase agreement with TVS Shriram Growth Fund 1 and others, the final closing of the transaction is subject to fulfilment of various conditions including buyout of the application software and other technology for its own use by IEX.
On November 5, FTIL had announced that it has entered into a share purchase agreement with TVS Shriram Growth Fund 1, S Gopalkrishnan, Lakshmi Narayanan, Rajeev Gupta, Dalmia Cement, Bharat Power Ventures Ltd, Kiran Vyapar Ltd, TVS Capital Funds Ltd, and Agri Power and Engineering Solutions Pvt Ltd for selling stake in IEX.
In the wake of NSEL fiasco, which came to light last year, various regulators had initiated action against FTIL.
Last December, the Forward Markets Commission had ruled that FTIL is not a 'fit and proper person' to hold anything more than 2 per cent shareholding in commodity exchange MCX.
In March this year, the Securities and Exchange Board of India (Sebi) had said FTIL is not "fit and proper" to own stakes in any stock exchange and directed it to divest existing holdings in MCX-SX and four other entities.
According to CERC's May order, decisions of Sebi and FMC have a direct bearing on the power market.
In that ruling, CERC had mentioned that "regulatory objectives of the power exchanges are similar to that of the commodity and stock exchanges in so far as the investor/ consumer protection, market integrity, transparency, fairness and governance are concerned".