The CBI is looking into alleged irregularities at the National Spot Exchange Ltd (NSEL), Finance Minister P Chidambaram said today, indicating the agency may take appropriate action.
"A complaint has been received by the CBI of violations of the Indian Penal Code and some other laws. The CBI is looking into that complaint and they will decide what further action needs to be taken on the complaint," he told reporters.
Chidambaram said three authorities -- the CBI, the Forward Markets Commission (FMC) and the Ministry of Corporate Affairs (MCA) -- are looking into the payment crisis at the commodity exchange, as per recommendations of the high-level committee headed by Economic Affairs Secretary Arvind Mayaram.
"I cannot possibly give a timeline for when each of these authorities will take action, but from what I have gathered, each of these authorities will take action as early as possible...They have listed out the irregularities," he said.
NSEL, a part of the Jignesh Shah-led Financial Technologies (FTIL) group, is grappling with a Rs 5,600 crore payment crisis after it had to suspend trading on July 31 after a government directive. It has defaulted on six consecutive weekly payments to its investors.
NSEL was not a registered or recognised association under the FMC and got exemption even before it started its business, Chidambaram said, adding investors who put in money in the exchange knew it was an unregulated entity.
"I think there is much more to the way NSEL started business than meets the eye. People seem to have given money to NSEL promoters with open eyes that it is not a regulated entity, that is violating conditions from day one. Yet they were giving money to NSEL. Many of them made money in initial stages and some of them lost money now," he said.
