FMC to soon take a call on e-series payments

A copy of the audit report have been submitted to advocates and the matter will soon come up in court

Commodity markets regulator FMC today said it will soon take a call on allowing investors to realise their funds in e-series contracts that were offered on the crisis-hit NSEL.

Under e-series contracts, retail investors bought and sold commodities in de-materialised form. It functioned like the cash segment in equities, but offered commodities in the demat form in smaller denominations. The e-series contracts involve 33,000 investors and around Rs 525 crore.

"Independent auditor Chokshi & Chokshi has submitted the audit report on e-series contracts. We are examining the report and we will soon take a call on this issue," Forward Markets Commission (FMC) Chairman Ramesh Abhishek told reporters on the sidelines of industry body Assocham event.

"The Bombay High Court has said, "remat (of e-series contracts) will be done at least four weeks after submission of the report. We will follow the court orders," he said.

Abhishek also mentioned that a copy of the audit report has been given to the advocates of the petitioner and matter will come up before the court.

In October last year, the Bombay high court directed the the embattled National Spot Exchange Ltd (NSEL), sister concern of MCX, to appoint an independent auditor to conduct a forensic audit on the e-series contracts.

The order was in response to a case filed by two investors of NSEL who had sought a stay on settlement of the gold and silver e-series contracts of the exchange.

On February 3, while responding to the Chokshi & Chokshi's draft audit report on the e-Series contracts, NSEL said as the auditors have digressed far beyond its terms of reference, the exchange has requested FMC to consider this aspect before taking any punitive steps.

FMC is monitoring recovery of dues of about Rs 5,600 crore at the spot commodity bourse, which suspended trade in July last year after two dozen counter parties declared their inability to settle payments.