SAT Upholds BSE Rejection Of Jetking Share Listing Plea Over Crypto Investments

The Securities Appellate Tribunal (SAT) has upheld BSE's decision to return Jetking Infotrain Limited's listing application for shares issued through a preferential allotment.

It held that the company's preferential fundraise and all subsequent actions, including investment in virtual digital assets (VDAs), before the amendment of its main objects clause were ultra vires its Memorandum of Association (MoA).

A coram of Presiding Officer Justice P.S. Dinesh Kumar and Technical Members Meera Swarup and Dr. Dheeraj Bhatnagar passed the order.

Jetking, which operates IT and network training institutes, changed its Memorandum of Association in September 2024 to add a clause allowing it to deal with crypto/digital assets, but only as something incidental to its existing business.

The amendment was approved by the Registrar of Companies (RoC) on November 4, 2024.

The company subsequently obtained BSE's in-principle approval on May 9, 2025, for issuance of equity shares on a preferential basis to identified investors. It received the issue proceeds later that month and used the funds to purchase VDAs on the CoinDCX exchange platform.

Jetking then applied for listing of the shares issued in the preferential allotment. However, BSE returned the application, prompting the appeal before the Tribunal.

Jetking argued that the first amendment, approved in November 2024, already authorised it to invest and trade in VDAs. It said the second amendment, approved by the RoC on July 7, 2025, merely expanded the scope of VDA-related activities.

Opposing the appeal, BSE contended that the first amendment related only to matters in furtherance of the company's existing objects. It did not authorise the company to carry on VDA business activities. BSE argued that since approval for the second amendment adding VDA business activities to the main objects clause had not been obtained when the preferential issue proceeds were deployed, the company's actions were ultra vires.

Examining the amendments, the Tribunal distinguished between the company's main objects and matters necessary for furtherance of those objects.

“Thus, it is clear that by the first amendment the Company sought amendment to clause 3(b) of the schedule i.e. matters necessary for furtherance of objects in clause 3(a). It is also an admitted position that as on the date of submitting the listing application, there was no amendment to clause 3(a). While rejecting the application, BSE has stated that the MoA of the Company did not permit raising funds and to invest in VDAs. This factual matrix is incontrovertible. Therefore, the Company calling for investment by the proposed pre-identified investors and all subsequent actions prior to July 7, 2025, on which the RoC approved the amendment of Clause 5 (III) A, are ultra vires. ” the tribunal held.

Relying on the Supreme Court's decision in SEBI v. Terrascope Ventures Limited, the Tribunal reiterated that ultra vires acts cannot be ratified.

Holding that no exception could be taken to BSE's decision, the tribunal dismissed the appeal.

For Appellant: Senior Advocate Ravi Kadam and Advocates Rohan Kadam, Nishith Desai, Viral Mehta, Suril Desai, Mohammad Kamran, Khyati Dalal, Chitransh Vijayvergia, Nav Dhawan, Parina Muchhala and Shruti Dhonde

For Respondent: Senior Advocate Shiraz Rustomjee and Advocates Tomu Francis, Arka Saha, Smriti Singh, Tarun Toprani, and Manal Shah