Home / Market / Stock-market-news /  Probe FTIL’s role in NSEL scam within 12 weeks, Bombay HC orders Sebi

Mumbai: The Bombay high court has directed the Securities and Exchange Board of India (Sebi) to look into demands for a probe into the role of Financial Technologies India Ltd (FTIL) in the 5,574 crore payment fraud at the National Spot Exchange Ltd (NSEL) within 12 weeks’ time. FTIL holds a 99.99% stake in NSEL.

In an order passed on 6 August, a bench comprising justice V.M. Kanade and justice B.P. Colabawalla directed Sebi to look into the complaints filed by the petitioners and decide on the basis of merit. The bench clarified that the court has not expressed any opinion on the merits of the case and that Sebi can decide if the complaints merit an investigation.

“...the writ petition can be conveniently disposed of by directing Sebi to look into the complaints and, if necessary, to investigate the same and the said process to be completed within a time-bound schedule and if possible, within a period of 12 weeks, on merits and in accordance with law," says the high court order.

The bench was hearing a petition filed by a bunch of entities—Smita Bhartia, Meenal Maheshwari and IGL Finance Ltd—who have invested money in NSEL, which suspended trading operations completely in August 2013 after the discovery of the fraud on 31 July. Mint has reviewed a copy of the petition.

According to the writ petition, the petitioners were forced to move the court as Sebi had refused to respond to various applications requesting a probe of FTIL’s role in the NSEL scam. The petition says that Sebi did not even reply to an application filed under the Right to Information (RTI) Act on 9 March 2015.

“The petitioners are compelled to file the present petition on account of the persistent failure/neglect of the respondent (Sebi) in investigating the complaints made by the petitioners to the respondent in respect of the fraudulent actions and violations committed inter alia by Financial Technologies (India) Limited," says the petition.

“Sebi has not even bothered to respond to any of the letters addressed by the petitioners... Despite the aforesaid repeated correspondence, there has been no action or investigation initiated by the Sebi in respect of the complaints made by petitioner," it adds.

FTIL and Sebi did not immediately respond to email queries.

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