Commodity markets regulator FMC has for the time being approved NSEL's plan to settle Rs 5,600 crore of dues and ordered the appointment of a forensic auditor as it has "serious doubt" over the credibility of accounts and information given by the spot exchange.
Crisis-ridden National Spot Exchange Ltd (NSEL) had submitted the plan to the Forward Markets Commission (FMC) on August 14 to clear dues to 13,000 investors over a period of seven months.
Noting that the NSEL's plan does not inspire confidence, the FMC asked the exchange "to go ahead with your settlement plan for time being as the payouts are already seriously delayed, which is causing deep anxiety and resentment among the sellers."
FMC, which has been empowered to oversee the settlement process, also came down heavily on the NSEL for not taking guarantees for the financial settlement and providing different sets of information at different times.
"The credibility of information given and the books of account/records maintained by NSEL have raised serious doubt on its authenticity. You (NSEL), are therefore directed to appoint a forensic auditor firm to establish the credibility of books of account, record maintenance by the exchange in next seven days," the regulator said in a letter to the NSEL.
The auditor would have to be appointed with FMC's consent. The NSEL has been asked to update the amount deposited in the escrow account on a daily basis to the regulator and on its official website.
While the exchange is required to guarantee the settlement of all financial obligations, FMC said that the NSEL mentioned in its settlement plan that the dues would be cleared subject to realisation of funds from payers.
"As such, exchange appeared to have disowned its responsibility of guaranteeing the financial settlement. Whereas the exchange has the sole responsibility of settlement of trade on the exchange...It cannot simply depend upon the realisation of pay-in obligation from buyers," FMC said.
The NSEL, promoted by Jignesh Shah-headed Financial Technologies India Ltd (FTIL), was engulfed in a crisis after its suspended trade on July 31, raising concerns about possible