NSEL: Govt officials under CVC lens for alleged irregularities

The Central Vigilance Commission (CVC) is looking into complaints of alleged irregularities by some Consumer Affairs Ministry officials in connection with Rs 5,600-crore payment default by National Spot Exchange Limited (NSEL).
The CVC has received complaints alleging criminal conspiracy and violation of norms by the officials of Ministry of Consumer Affairs, Food and Public Distribution in giving necessary approval to NSEL for its operation, official sources said.
Prima facie, it appears that rules were probably overlooked and violated by the ministry officials. The complaints are being examined for further action by the probity watchdog, they said.
Commodity exchange NSEL, promoted by Jignesh Shah-led Financial Technologies group, is facing multi-agency probe for the payment crises. Commodity trade in NSEL has been suspended following the issue.

NSEL had commenced its one-day operation after central government notification on June 5, 2007. It began live trading from October 15, 2008.
The Consumer Affairs Ministry had, by a Gazette notification, on February 6, 2012 appointed Forward Markets Commission (FMC) as the designated agency for the NSEL to file all information or returns relating to the trade.

Meanwhile, a Finance Ministry appointed panel headed by Economic Affairs Secretary Arvind Mayaram has pointed out irregularities in its report on the NSEL.
"The Mayaram panel report has suggested that the Central Bureau of Investigation (CBI), FMC and Ministry of Corporate Affairs (MCA) must take appropriate action. They have listed out the irregularities. These authorities are looking into the matter. They will take action," Finance Minister P Chidambaram had said recently.

Chidambaram said that NSEL was not a registered or recognised association under the FMC but got exemption even before it started its business.
The investors knew that they were investing in an entity which was unregulated, the Finance Minister has said.
The MCA had asked Registrar of Companies, Mumbai to collect details of NSEL and its other group entities as well.
Besides NSEL, FT group has promoted the country's top commodity bourse MCX (Multi Commodity Exchange), stock exchange MCX-SX, as also entities engaged in the business of clearing corporation and exchange technology solutions, among others.