NSEL scam: govt, MCA told to expedite action

The Finance Ministry has advised the Ministry of Corporate Affairs to decide on the draft order on the merger of the National Spot Exchange Limited (NSEL) with Financial Technologies India Limited (FTIL) by February 15 — the deadline set by the Bombay High Court. “In a meeting today, Ministry of Corporate Affairs advised to decide on draft order of merger within stipulated time i.e.,by February 15, 2016,” tweeted the Ministry of Finance on Thursday. In a series of tweets, the ministry said the government of Maharashtra has been advised to take action for auctioning properties that do not have any kind of encumbrance or have the approval of the court. Further, the Sebi has been advised to examine and take the necessary action against defaulting brokers as per law. On August 21, 2014, MCA issued a draft order proposing to merge NSEL with FTIL, a public-listed entity. The merger would force FTIL to assume all the liabilities of the Mumbai-based spot exchange. The merger would also make FTIL a party to the ongoing litigations involving NSEL. The merger was proposed by the erstwhile commodities market regulator, Forward Markets Commission , which was merged with Sebi in September 2015. The NSEL scam, amounting to over Rs 5,6000000000, came to light on July 31, 2013, when the exchange suspended trading in most of its contracts. By August, trading was completely suspended on the exchange, in which FTIL owns 99.99% stake. NSEL has been under the scanner of various regulatory bodies like Sebi, income tax, Enforcement Directorate and the Economic Offences Wing of the Mumbai Police. FTIL has also been barred from holding a stake in any exchange in the country. The proposed merger of NSEL with FTIL has become a sensitive matter as FTIL has been aggressively opposing it, even questioning the constitutional validity of section 396 of the Companies Act under which it has been proposed.