Home / Companies / News /  NSEL crisis: Mutiple agencies taking action, says Chidambaram

New Delhi: Action against the National Spot Exchange Ltd (NSEL), which is battling a 5,600 crore payments crisis, is being taken by the Forward Market Commission (FMC), ministry of corporate affairs (MCA) and the Central Bureau of Investigation (CBI) based on the Mayaram committee report, finance minister P. Chidambaram said on Thursday.

Arvind Mayaram, secretary in the department of economic affairs and the head of a government panel on the NSEL crisis, had recently submitted the panel’s report to Chidambaram.

“The Mayaram report has suggested that these different authorities must take appropriate action. It has listed out irregularities," Chidambaram said.

While FMC will take action under the FMC Act, the ministry of corporate affairs is examining the report in light of the companies Act, Chidambaram said.

“A complaint has been received by the CBI for violation of the various India Penal Code and some other laws. The CBI is looking into that complaint and they will decide what further action should be taken on the complaint," he said. “I cannot possibly give a time limit when each of the authorities will take action but what I have gathered each of the authorities will take action as early as possible."

However, Chidambaram said the Mayaram committee report says there is no systemic danger as a result of NSEL’s failure. “There is no danger of it spilling over to any other market. That is a categorical finding of the Mayaram committee report, but I have asked both Sebi (Securities and Exchange Board of India) and FMC to keep a careful eye," he added.

Chidambaram said the NSEL crisis cannot be compared with the Satyam case. “It is not a recognized or registered association under the FMC Act. It did not have any business. But it got an exemption even before it started the business. And the exemption was subject to conditions. On day one, condition one and two were violated, yet it carried on business. Since it was not a regulated entity, there was no regulator to ask it questions. So there is much more to the way NSEL started business than meets the eye," Chidambaram said.

The finance minister said that people seem to have given money to the NSEL promoters with open eyes when it was not a regulated entity, possibly knowing that it was violating conditions.

NSEL plunged into a crisis after suspending trading in all its forward trading contracts on 31 July without specifying any reason, but believed to be on a government directive. The commodities spot exchange on Tuesday missed, for the sixth week in a row, meeting a payment schedule to settle about Rs5,600 crore owed to about 13,000 investors.

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