Crisis-ridden bourse NSEL defaulted for the 11th straight time on Tuesday as it could pay only Rs 29 crore to investors against a scheduled payment amount of Rs 174.72 crore.
Claiming innocence, former head of the National Spot Exchange Limited (NSEL) Anjani Sinha, held in the Rs 5,600 crore (Rs 56 billion) payment crisis, on said that he was acting under the board's pressure, sources said.
Sebi on April 4 gave the brokerages 60 days to have their books vetted by third-party auditors.
The Enforcement Directorate on Friday arrested the CEO of a defaulting firm on money laundering charge in connection with its probe in the National Spot Exchange Limited scam case.
The Central Bureau of Investigation (CBI) will soon quiz Securities and Exchange Board of India (SEBI) Chairman U K Sinha as well as former head of the regulatory body M Damodaran in connection with a Preliminary Enquiry (PE) to probe granting sanction to Jignesh Shah-founded Financial Technologies (India) and MCX-SX.
Shares of Multi Commodity Exchange of India (have tanked over 11% to Rs 428 on back of heavy volumes on the bourses.
The stock market watchdog had said any adverse findings by other regulators might have a bearing on the exchange.
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The government asked the NSEL to become a responsible guarantor to the Rs 5,600-crore (Rs 56-billion) dues to investors and meet its commitments.
Crisis-ridden NSEL on Wednesday declared ten more entities as defaulters after they failed to pay their dues on the second-pay out, taking the number of members who are to pay dues at 19.
Crisis-ridden bourse NSEL paid about Rs 9 crore (Rs 90 million) against the scheduled payment amount of Rs 174.72 crore (Rs 1.74 billion), defaulting for the 17th straight time.
The crisis-hit NSEL is promoted by Jignesh Shah-led Financial Technologies (India) Ltd.
Union minister Jairam Ramesh on Tuesday attacked the Central Bureau of Investigation for initiating preliminary enquiry against ex-SEBI chairman C B Bhave and ex-member K M Abraham on the issue of granting sanction to MCX Stock Exchange, and alleged that "larger forces" were working to fix them.
The agency's latest action, under Prevention of Money Laundering laws, had been taken against the borrower company and its two group companies, which owe the investors Rs 922 crore (Rs 9.22 billion), sources said.
Crisis-ridden National Spot Exchange Ltd (NSEL) on Wednesday said its Delhi-based member Mohan India Ltd has agreed to pay to the exchange about Rs 771 crore (Rs 7.71 billion) in final settlement over the next one year.
The Ministry of Corporate Affairs ordered the inspection of the books of accounts of NSEL and Financial Technologies India Ltd to ascertain if any rules under the Companies Act were violated, a senior official said.
Both Corporate Affairs and Finance Ministries are studying the feasibility of implementing the FMC's proposals.
The government on Tuesday said it is keeping a close watch on the developments in the crisis-ridden NSEL and will take action once reports of the two committees looking into the problems of the exchange are received.
His comments came in response to a query on whether Securities and Exchange Board of India would be initiating action against MCX-SX which rejigged its board yesterday amid continuing payment crisis at its group firm National Spot Exchange Ltd.
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The exchanges have observed significant price and volume movement in the scrips of MCX in the recent past.
The investors write to new finance minister; say refunds, not arrests, their priority.
Earlier this month, the CBI registered a Preliminary Enquiry against former Sebi Chairman C B Bhave and ex-member K M Abraham, as also against Jignesh Shah-founded FTIL and MCX, among others.
Commodity futures market's dream run came to a halt in 2013 as a Rs 5,600 crore scam in Jignesh Shah-led spot exchange NSEL and imposition of transaction tax on non-farm items hampered the growth of business, with turnover estimated to dip by 30 per cent to Rs 125 lakh crore.
In the first arrest in the NSEL's Rs 5,600 crore (Rs 56 billion) payout scam, a top official of the beleaguered spot commodity bourse, which defaulted on its payment for the eighth time in a row yesterday, was held on Wednesday by Mumbai police's Economic Offence Wing (EOW).
Indian business, on quite a different trajectory from its global counterpart, remains relatively insulated from any kind of backlash.
The FT stock took a beating, losing 80 per cent in two sessions before recovering. Though in an exchange announcement following the government's missive on July 12, FT identified NSEL as a material subsidiary, rumour mills contemplated two possible transactions: a sale between May 30 and June 30 which had led to the subsidiary becoming an associate and another transaction between June 30 and July 15 when the associate again became a subsidiary.
The NSEL chief said the exchange is also seeking the help of the Delhi government.
Reliance Capital, the financial services arm of Anil Ambani-led Reliance Group, has also listed several other concerns with regard to MXC deal.
In the interview to Business Standard last week, Chary had stated that the government's proposal to merge was unwarranted and that FTIL shareholders did not benefit from higher dividends from NSEL.
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FTIL group is in big trouble after over Rs 5,500 crore payment crisis surfaced at its subsidiary NSEL last year.
The FMC on Thursday barred the National Spot Exchange and group firms from auctions of commodities held by the bourse after a complaint that firms related to the former managing director took part in the bidding process.
The Income Tax department has declined to share details of probe being carried out in Rs 5,600 crore (Rs 56 billion) payment default by National Spot Exchange Limited (NSEL) saying it would "hamper the process of investigation or apprehension of offenders".
CBI sources said the shell companies were allegedly being used by the suspects to divert loan funds meant for specified purposes, creating fake invoices, and 'round-tripping' of funds to evade taxes and generate black money.
The company's accounts were audited by CAG as its shareholders include public sector banks.
MCX and MCX-SX are facing the worst crisis in their existence following the Rs 5,574 cr fiasco at the National Spot Exchange.
MCX Stock Exchange, set up by crisis-hit NSEL's promoters, on Friday appointed Saurabh Sarkar as CEO and announced plans for fresh capital infusion by its existing shareholders among measures to boost business.
Under U K Sinha, Sebi became a pan-India organisation with local offices in 16 cities
Preliminary investigations conducted by capital markets regulator Securities and Exchange Board of India and inputs from other regulators and government departments suggest that some brokers were offering structured financial products to their HNI clients under some portfolio investments schemes for high returns of 10-20 per cent.
After defaulting for a consecutive time in paying its investors, National Spot Exchange Ltd (NSEL) got a Rs 177-crore (Rs 1.77 billion) lifeline from its main promoter, Jignesh Shah-run Financial Technologies.
FTIL stock on Thursday fell by over 60 per cent in early morning trade, while that of Multi Commodity Exchange plunged by 20 per cent following concerns about another group entity National Spot Exchange Ltd.
The RBI view comes within a fortnight of the sectoral regulator FMC in a report stating that the promoter Shah and promoter company Financial Technologies are not eligible to run the crippled exchange, an order challenged by the group in the Bombay High Court.
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