'Wrongdoers' removed, steps being taken, NSEL assures HC

Written by Press Trust of India | Mumbai | Updated: Sep 6 2013, 02:42am hrs
National Spot Exchange Limited (NSEL) today assured the Bombay High Court that it was taking steps to protect investors' interests, and an oversight committee had been appointed to look into the alleged Rs 5,500 crore scam.

It also said that "wrongdoers" had been now removed from its management.

The division bench of Chief Justice Mohit Shah and Justice M S Sanklecha was hearing a petition filed by Indian Council of Investors seeking direction to NSEL that it should safeguard the rights of the investors after the bourse plunged into a crisis in July this year.

The PIL also seeks that commodity market regulator Forward Market Commission and other authorities should take immediate custody and control of commodities stated to be lying in the warehouses.

Senior counsel Janak Dwarkadas, appearing for NSEL, today told the court that it had taken some steps.

"The previous employees who were responsible for the scam have been removed. A fresh management has been appointed. An oversight committee comprising a former judge and former Maharashtra Director General of Police D Sivanandan has been appointed," he said.

"It is not that the NSEL is not doing anything. The wrongdoers are not in control anymore. Six complaints against the errant employees and borrowers have been lodged with the city police's Economic Offences Wing," he said.

Dwarkadas added that so far Rs 850 crore of the guarantee fund had been used to pay back the investors' dues.

The bench directed NSEL, government and other respondents to file affidavits-in-reply within four weeks. Judges also said that if any bail/ anticipatory bail petitions were filed by the accused in the case, the present bench would hear them.

NSEL, promoted by Jignesh Shah-led Financial Technologies (India) Ltd, is facing the problem of settling dues of Rs 5,500 crore of 148 members/brokers, representing thousands of investor-clients, after it suspended trading on July 31 on the government's direction.