MCA to check if NSEL violated companies law

Ministry to also mull future course, actiouns required in case of violations

The Ministry of Corporate Affairs would soon meet to discuss the National Spot Exchange Ltd (NSEL) crisis and decide whether the companies law had been violated. In case of violations, the ministry might also consider the action to be taken.

“I am meeting officers to take stock of the situation. We will discuss the possible things that can be done,” Minister for Corporate Affairs Sachin Pilot told Business Standard, confirming the Department of Consumer Affairs had recently referred the matter to the ministry.

Pilot added his ministry would primarily look at the matter from the perspective of the companies law and try to arrive at a conclusion in a couple of days.

The consumer affairs department had urged the corporate affairs ministry to seek details from the Registrar of Companies on the nature of ownership in NSEL and the kind of liability the promoters had. The beleaguered exchange, set up to provide an electronic platform for buying and selling agricultural and other commodities, was found to be carrying out trades in forward commodity contracts as well, in violation of rules. Trade on the exchange was suspended on July 31, following a government directive. This triggered a payment crisis of Rs 5,600 crore.

While NSEL has proposed a seven-month plan to settle dues, the bourse has already come under the scanner of various ministries and regulators such as the consumer affairs ministry, the Forward Markets Commission and the Securities and Exchange Board of India, with each looking into various aspects of the crisis.