NCDEX commissions forensic audit of castorseed futures

Leading agri-commodity bourse NCDEX today said it has initiated a forensic audit into the castorseed futures trading which was banned earlier this year due to alleged price manipulation.
On January 27, NCDEX had suspended trading in castorseed contracts, pursuant to which regulator Sebi also launched its probe and barred 16 brokers and traders from the securities market for manipulation in castorseeds trading at NCDEX.
"We appointed a forensic auditor right after the castorseed incident took place. The exchange has commissioned the audit but the Sebi has requested the Board to insulate the exchange management from the audit report," NCDEX Managing Director Samir Shah told PTI.

Asked whether the audit report has been submitted to the exchange, he said, "The audit report is to submitted directly to the Board, the exchange and me are no longer involved."
He declined to share further details.
Meanwhile NCDEX had earlier this month announced a compensation of Rs 120/quintal to sellers who had valid deliverable stocks in the exchange-accredited godowns.

The exchange had said that compensation will be given from the funds deposited by 16 defaulting brokers and traders, whom regulator Sebi had in March barred from the securities market.
Stating that working relation with Sebi has become much more stronger, Shah said, "After the castorseed episode, the the information sharing and rigour of interaction with the regulator has increased and gone to another level which gives us and market a higher level of confidence."

He said that there was drop in trading volumes on the exchange platform after the castorseed expisode. But trade volumes recovered from mid-April through performance of other contracts.