New Delhi: The government on Friday said it has not made any recommendation to the NCLAT for declaring brokers involved in the payment crisis at the NSEL as “not fit and proper", as such power lies with markets regulator Sebi.

The 5,600-crore National Spot Exchange Ltd (NSEL) payment scam came to light in 2013.

“The Ministry of Corporate Affairs has not made any recommendation to the National Company Law Appellate Tribunal (NCLAT) for declaring brokers involved in the payment crisis at NSEL as not fit and proper," Minister of State for Finance Pon Radhakrishnan said in a written reply to the Lok Sabha.

Such powers to declare not fit and proper lie with the Securities and Exchange Board of India (Sebi), he added.

According to the minister, the markets regulator has initiated enquiry proceedings against nine brokers based on the investigation report dated August 31, 2018, received from the Serious Fraud Investigation Office (SFIO).

SFIO, multi-disciplinary organisation involved in detecting white-collar crimes/frauds and comes under the corporate affairs ministry, in its report referred the names of the brokers to Sebi for necessary action.

However, “SFIO in its report has not recommended the brokers to be declared unfit and improper, he added. In a statement, NSEL said the Corporate Affairs Ministry in its pleadings before the NCLAT had stated that “cases of brokers (non-defaulting) be referred to Sebi for necessary stringent action, including preventing directors of these brokers from accessing the money market and if required declaring them not fit and proper".

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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