Millennium Post

NSEL and FTIL directors’ role under Corporate Ministry lens

In the wake of the National spot Exchange Limited (NSEL) fiasco, the Corporate Affairs Ministry is looking at the role of directors at the exchange and its parent firm Financial Technologies India Limited (FTIL) to ascertain whether there has been violation of laws at board level.

The continuing crisis at National Spot Exchange Ltd,  part of Jignesh Shah-promoted Financial Technologies group, has already seen significant fallout with some arrests and rejig of boards at the bourse and some group firms.

The ministry, which ensures compliance of entities with the Companies Act, is soon expected to receive the inspection report on the records of NSEL, FTIL and MCX.

Sources said the ministry would be looking at whether NSEL and other entities violated companies law.

The role and responsibility of respective board as well as ‘fit and proper’ criteria of the directors would be looked into, sources said.

The inspection of books of the three companies has been ordered under Section 209 A of the Companies Act.

National Spot Exchange Ltd, a commodity exchange, is grappling with settling dues of about Rs 5,600 crore after it suspended trading on 31 July following a government directives.

The bourse has come under the scanner of multiple agencies, including the Economic Offences Wing of the Mumbai Police.

Earlier this week, Corporate Affairs Minister Sachin Pilot said that certain entities were under scrutiny with regard to NSEL issue.

‘(For) entities that need to be scrutinised further, I am not saying investigate but scrutinise for any complaint that we receive, it is incumbent on us to take action with regard to compliance. That process is on,’ the Minister had said without taking any names.

A high panel headed by Economic Affairs Secretary Arvind Mayaram had submitted a report on the National Spot Exchange Ltd fiasco.
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