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MOFSL, IIFL fall as Sebi declares commodity arms unfit to undertake trading

Sebi maintained that the two brokers had a close association with NSEL and allowed themselves to "become a channel".

SI Reporter  |  New Delhi 


Shares of Motilal Oswal Financial Services (MOFSL) and Holdings slipped as much as 5.11 per cent and 8.99 per cent, respectively in intra-day trade on BSE after the market regulator Securities and Exchange Board of India (Sebi) in an order on Friday declared that the commodity broking arms of Motilal Oswal and India Infoline (IIFL) are not ‘fit and proper’ to undertake commodities derivative trading, as part of an ongoing investigation into the

The market regulator is probing a Rs 5,600 crore payment default which broke out at the spot platform NSEL in 2013 in which broking firms like Motilal Oswal Commodities Broker are alleged to have involved in misselling of NSEL contracts without having underlying commodities in the warehouses. READ MORE

maintained that the two brokers had a close association with NSEL and allowed themselves to “become a channel”.“Thus… the noticee is not a fit and proper person to be granted registration/to operate as a commodity derivatives broker”, the order read.

In July 2013, Jignesh Shah-promoted NSEL had defaulted in payment of Rs 5,600 crore. Several investigative authorities have traced the money trail to NSEL and its 22 defaulting brokers who were commodity producers or suppliers.

Shares of the companies, however, pared their initial losses and were trading marginally lower in late morning deals. Both borkerages issued clarifications in respect of the order. Click here for MOSL's clarification Click here for IIFL's clarification

Both the stocks ended weak on Monday. While closed 1.52 per cent lower at Rs 603, slipped 0.27 per cent at Rs 364.35 apiece on BSE. The S&P BSE Sensex, in comparison, closed 0.95 per cent higher at 36,213 levels.

First Published: Mon, February 25 2019. 10:46 IST