More trouble is heading the National Spot Exchange Ltd (NSEL) way. The Central Bureau of Investigation is probing if there has been a violation of provisions of the Indian Penal Code in this matter.

However, the Government ruled out any systemic danger due to the Rs 5,600-crore payment crisis in the spot exchange. It said there was no fear of the crisis spilling over to other markets.

“A complaint has been received by the CBI for violations of various sections of IPC and others. The CBI is looking into that complaint and they will decide what further action can be taken,” Finance Minister P. Chidambaram told reporters when asked about the Arvind Mayaram panel report on the NSEL crisis. The panel submitted its report early this week.

Chidambaram said based on the report, action has to be taken by different authorities. Commodity markets regulator Forward Markets Commission (FMC) is examining the report and will decide on the action to be taken under the Act.

The Ministry of Corporate Affairs is also examining the report.

The Finance Minister said NSEL was not a registered or recognised association under the FMC, but received exemption even before it started business.

“I think there is much more to the way NSEL started business than meets the eye. People seem to have given money to NSEL promoters with open eyes… though it is not a regulated entity. Many of them made money in the initial stages and some of them lost money now,” Chidambaram said. Refusing to equate the NSEL crisis with the Satyam issue, Chidambaram clarified, “Government does not come into the picture at all. It is a company. It is not a regulated entity which got an exemption order even before it started business. Therefore, what legal rights flow to the company and investors, the courts will adjudicate that.”

(This article was published on September 26, 2013)
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