In a bid to resolve the crisis at the National Spot Exchange Ltd, the Government is expected to announce some more tough measures over the next two days. This could even include superseding the board of the bourse.
The recently set up task force in the Finance Ministry, comprising nominees from multiple agencies, such as the Income Tax Department, the Enforcement Directorate and SEBI, have started probing the issue, a Finance Ministry official, who did not wish to be quoted, said.
Meanwhile, the Forward Markets Commission (FMC) has sent a strongly-worded letter to the NSEL board asking it to take action against the defaulters. The FMC wants all the commodities that were offered as collateral by the defaulters to be auctioned.
The regulator has directed NSEL to take over the assets, documents, books and cheques of the defaulters and liquidate all assets to recover the dues. All proceeds from auctions and realisations of assets should be deposited in an escrow account.
The FMC is also seeking punitive action against the defaulters, based on the findings of the collateral management agency of NSEL. The directions come after the FMC rapped NSEL for not being able to any of the settlement plans – the first on July 31 and the revised plan of August 14 – spelt out by it.
According to officials, the I-T Department on Wednesday examined the godowns of ARK Imports, which owes Rs 719.42 crore. The Finance Ministry task force will spell out certain measures within the next 48 hours, including the possibility of superseding the board of NSEL, the official said.
On Tuesday, NSEL failed to pay out Rs 174.72 crore to investors as scheduled, since only Rs 92.12 crore was deposited into the escrow account. Of the 24 entities that owed money, 11 failed to pay up. This prompted the FMC to say that defaults by the NSEL have cast doubts over the ‘fit and proper person’ status of the board of the exchange.
The NSEL stopped its operations on July 31 following a Government directive in the aftermath of violation of certain rules triggering a Rs 5,600-crore payment crisis.