Govt monitoring follow-up action in NSEL case: Minister

Recommendations of Special Team on which action needs to be taken was sent to seven offices concerned for action thereon

Government is monitoring the progress of follow-up action in the case regarding National Spot Exchange Limited (NSEL) payment crisis on the basis of report submitted by a special team, Parliament was informed today.

"Recommendations of Special Team on which action needs to be taken was sent to seven offices/departments/ministry concerned for action thereon.

"The progress of the follow up action is being monitored through their Action Taken Notes and meeting at higher level," Minister of State for Finance Namo Narain Meena said in a written reply to the Lok Sabha.

Meena said the Finance Ministry had received a request to investigate the multi-crore finance scam at NSEL.

He said a special team of secretaries under chairmanship of Secretary, Department of Economic Affairs was constituted to examine violation of laws and regulations by NSEL or any associated companies or any of the participants and to suggest measures to be taken to ensure that there is not systematic impact of the NSEL developments.

"The Special Team submitted its report...The Team concluded that the NSEL episode may not have any major systematic impact. However, there are certain recommendations in the report on which follow up actions are required to be taken by offices/departments/ministry concerned," he said.

NSEL on July 31, 2013 had suspended trading in all one day forward contracts (except e-series which were suspended on August 6, 2013) and deferred the settlement of all outstanding contracts for 15 days.

Subsequent to such suspension of trading and deferment of settlement, a payment crisis of about Rs 5,600 crore had arisen, Meena said.

The Minister further said that the company then announced a settlement plan spread over 30 weeks providing for an initial weekly payment of Rs 174.72 crore to the affected members beginning from August 20, 2013.

"However, on August 20, a payment of only Rs 92.13 crore was made to members," he said.

Jignesh Shah led Financial Technologies India Ltd's (FTIL) group firm NSEL has so far settled about Rs 253 crore against about Rs 5,600 crore dues to 13,000 investors.

Various regulators including Sebi and FMC are looking into the role of some brokerage firms on allegedly charging of high transaction charges and providing portfolio management and margin funding services to their clients in violation of regulations.