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Secretaries’ panel finalises report on NSEL crisis

Sep 21 2013, 03:21 IST
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SummaryForward Markets Commission (FMC) is set to decide on whether Jignesh Shah-promoted Financial Technologies Ltd can continue holding stake in Multi-Commodity Exchange (MCX).

While a panel of secretaries is set to wrap up its report on crisis-hit NSEL soon, the Forward Markets Commission (FMC) is also set to decide on whether Jignesh Shah-promoted Financial Technologies Ltd can continue holding stake in Multi-Commodity Exchange (MCX).

“The report has been finalised and we will be presenting it to finance minister soon,” said Arvind Mayaram, secretary, department of economic affairs after the meeting of the panel of secretaries on Friday.

While Mayaram declined to comment on the modalities of the report, sources said the crisis-ridden bourse may have violated the Companies’ Act as well as money laundering laws. “The report deals with violation of a number of laws and different agencies will now deal separately with each of these issues,” said a person close to the development.

Financial Technologies, which is also the promoter of NSEL, holds 26 per cent stake in MCX. The commodity market regulator will be sending a show cause notice to three directors of MCX to examine whether they have any links to the payment crisis at NSEL.

The FMC will use the “fit and proper” criteria to decide the fate of three directors Shah, Joseph Massey and Shreekant Javalgekar. “If they don’t make the criteria, Financial Technologies will have to decrease its stake in MCX,” said a second person close to the development.

NSEL is facing the problem of settling Rs 5,600-crore dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on government’s direction. The Prime Minister’s Office (PMO) had the suggested setting up of a special team led by the department of economic affairs. The panel had two working groups — one under the Enforcement Directorate and the second under RBI deputy governor KC Chakrabarty.

MCX-SX sets up committee

Mumbai: Faced with a Sebi order to improve its governance structure, MCX Stock Exchange has set up a high-level committee to oversee its key functions, including top-level appointments and significant financial matters. PTI

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