Exchange restrained from settling till Monday

The Bombay High Court has called for complete details on e-series investment from the National Spot Exchange, which is struggling to settle dues worth Rs 5,600 crore after it suspended trading abruptly from August 1.

Hearing the writ petition filed by individual investors Tarun Amarchand Jain and Ashish Seth, the Court has restrained the exchange from settling e-series till Monday, when the case comes up for hearing again.

The petitioners have sought Court direction to the exchange to merge the delivery and settlement of e-series with the other contracts. The payment and settlement under the e-series should be made on the same terms as settlement proposed for the other contracts, the petitioners pleaded.

The petitioners wanted the NSEL board to be superseded and pay e-series investors as per the settlement process being implemented by the commodity market regulator Forward Markets Commission. They also wanted the exchange to restrain NSEL from making any ad hoc payment to preferred e-series investors. This development will further delay the e-series settlement.

NSEL FORUM FILES WRIT

Disappointed with the Government’s response to the scam, the NSEL Investors Forum along with five other individual investors filed a writ petition on Friday against a Ministry of Consumer Affairs, Forward Markets Commission, National Spot Exchange, Financial Technologies, Jignesh Shah, Anjani Sinha, and other NSEL board members, besides other Government investigative agencies. This is the fourth petition filed in the Bombay High Court.

The petitioners have sought a court-monitored time bound investigation into the entire NSEL scam in order to safeguard the investor interest.

Refuting Finance Minister P. Chidambaram’s statement that the exchange was an unregulated entity, Sharad Kumar Saraf, Chairman of the Forum, said the exchange had a set of regulations to follow, but was provided exemption.

Drawing a parallel to various exemptions given under excise and customs duty, Saraf said just because duty exemption is given it does not mean that there are no rules to follow, he said.

“If NSEL is unregulated then why did the Government issue a show cause notice in April 2012 and wait for nearly one year to act on it,” he asked. On Chidambaram’s contention that NSEL investors are high networth investors, Saraf wondered whether it was okay for the Government if HNIs lose money. “Tomorrow if a thief robs an HNI, is it right for the police to say it is between the HNI and the thief and I do not have a role to play?” questioned Saraf.

suresh.iyengar@thehindu.co.in

(This article was published on September 27, 2013)
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