Audit firm finds anomaly in warehouses; exchange collects just Rs 10 cr for third payout

The Government is expected to crack down on National Spot Exchange promoters after taking into account the report from the Forward Markets Commission.

The report submitted by SGS, the Swiss firm hired by the exchange to audit stocks in the warehouses, has found that the exchange has overstated the availability by 85 per cent. The Forward Markets Commission, which was asked by the Government to oversee the settlement process, directed the exchange to appoint an independent audit firm to look into the warehouse stocks.

The report presented by SGS has been forwarded to the Commerce Ministry which, in turn, has submitted it to the Finance Ministry.

The Government has formed two task forces under the leadership of Economic Affairs Secretary Arvind Mayaram.

The task forces are deliberating on the report sent by the Commission. It would meet in a day or two and submit its final findings by the weekend based on which action will be taken, said a Commerce Ministry source, who did not want to be identified.

The task force consists of the Deputy Governor of RBI, besides members from the Directorate of Enforcement, SEBI, Ministry of Corporate Affairs, the Forward Markets Commission, Central Bureau of Direct Taxes (Investigation wing), Serious Fraud Investigation Office and the Directorate of Revenue Intelligence.

ANOTHER DEFAULT?

NSEL has managed to collect only Rs 10.32 crore against Rs 175 crore it needs for the third settlement due on Tuesday.

The crisis could deepen, if the exchange fails to muster the required amount. It took Rs 177 crore as bridge loan from its parent Financial Technologies for settling the dues of small investors below Rs 10 lakh last week.

On Monday, NSEL received Rs 3.70 crore from Topworth Steels and Power, Rs 50 lakh from Metkore Alloys and Industries and Rs 15 lakh from Aastha Minmet India. The exchange had defaulted the first payment that went by on August 20.

suresh.iyengar@thehindu.co.in

(This article was published on September 2, 2013)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.