Govt plans administrative measures for NSEL crisis

NSEL has already sacked its Managing Director and CEO Anjani Sinha and six other top executives

After nationwide raids by the Income Tax Department at the offices of members of the beleaguered National Spot Exchange Ltd (NSEL), the government is likely to take more administrative measures against the exchange in the next two-three days.

Officials in the know said the steps could include suspending the NSEL board, appointing a government-appointed administrator and attaching the exchange's properties and stocks. "The NSEL fiasco is now being very seriously looked at by the government and all possible measures will be taken by it to ensure all investors, particularly the small ones, get back their money," said a senior government official.

In a swift operation, the Income Tax Department on Thursday conducted survey operations at the business premises of 24 NSEL members facing irregularity charges in settling Rs 5,600 crore of dues to investors. The members included two Gujarat-based groups -N K Proteins Ltd and Swatik Overseas Corporation- said sources in the I-T department in Ahmedabad. According to NSEL, N K Proteins owes a massive Rs 967 crore, around 17 per cent of the total funds availed of from NSEL, and has been declared a defaulter. Swatik Overseas has to pay Rs 98.18 crore towards the settlement.

Income tax department sources said teams from the department conducted searches at the offices of NSEL members across cities such as Mumbai, Hyderabad, Ahmedabad, Mehsana, Deesa, Akota, Kolkata, Nagpur and Jaipur. The action was aimed at checking the stocks and goods stored in the warehouses of these firms, as well as their account books and transactions to ascertain any possible tax evasion and verify their claims of huge dues, the sources said.

Following suspension of trade on July 31, NSEL has to settle Rs 5,600 crore of dues. So far, the exchange has been able to settle only Rs 92.12 crore of the scheduled of Rs 174.72-crore payment it had committed to the Forward Markets Commission.

The exchange has sacked its managing director and chief executive Anjani Sinha and six other senior executives in the wake of the crisis.