SFIO probe demanded in NSEL affairs

NSEL is facing problem of settlement after it suspended trade in one-day forward contracts on July 31 following govt direction

As the Rs 5,600 crore payment crisis looms over the National Spot Exchange (NSEL), a Member of Parliament has asked Prime Minister Manmohan Singh to institute a probe by SFIO into the affairs of the exchange and book the guilty.

NSEL is facing the problem of settlement after it suspended trade in one-day forward contracts on July 31 following the government direction. Yesterday, it stopped trading in e-series contracts in gold in anticipation of the notification to this effect.

The ban finally came after the market hours.

"I request that this entire affair be handed over to the Serious Fraud Investigations Office immediately so that the wrong-doings in this case are fully documented, and the guilty booked," Congress MP Vijay Darda said in a letter to Singh.

A major crisis erupted at NSEL after it suspended most trades on its platform on July 31, raising concerns of payment default. The exchange, which is promoted by Financial Technologies India Ltd (FTIL), plans to submit its settlement plan to the Forward Markets Commission (FMC) by August 14.

"There are other exchanges which are under the same management where also irregularity may happen, so precaution should be taken immediately to see to it that on other commodity exchanges any irregularity does not take place," the letter said.

The exchange has to settle Rs 5,600 crore as dues.

"If investors will lose money in NSEL, trust of investor in Indian financial market and commodity market will be lost as well there will be cascading effect in financial system," it added.