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NSEL crisis: Govt seeks RoC report on matter

The Corporate Affairs Ministry has sought a report from the Registrar of Companies (RoC), Mumbai on National Spot Exchange, which is engulfed in a major payment crisis involving over Rs 5,500 crore.

While NSEL is already being probed by agencies like the Income Tax Department, Enforcement Directorate (ED) and commodity market regulator Forwards Markets Commission (FMC), among others, the Corporate Affairs Ministry has asked RoC Mumbai to submit a report after a technical scrutiny of the financials and other corporate filings of the company.

NSEL, part of Jignesh Shah-led Financial Technologies group, was set up to provide a nationwide electronic platform for spot trading in various commodities. It is being probed by various agencies for suspected violations of regulations in the commodities markets and tax laws after NSEL defaulted on payments totalling more than Rs 5,500 crore. The RoC, which comes under the Ministry of Corporate Affairs (MCA), has been asked to check whether NSEL has violated norms relating to the Companies Act as well.

Asked whether there will be an SFIO (Serious Fraud Investigation Office) probe into NSEL, Corporate Affairs Minister Sachin Pilot said that the government has already set up two committees to investigate into the matter.


'Beyond that, I've asked for a report from the RoC Mumbai regarding non-compliance to the companies law,' Pilot said.
'The Income Tax Department and ED are looking at different matters. As far as MCA is concerned, we will look into whether there have been any non compliance to the companies law, whether there have been any mismanagement of the company per se, or if there are any corporate governance issues,' he said. 'That report (from RoC) should come to us in a few days. It is a report that I have called for under Section 234 of the Companies Act. Once that report comes to me, then we will take a view on what would be the next course of action.

'But I can assure you if they have done anything wrong under the company law, if we find that there is something amiss, then we will take strong action,' the minister added.
Under Section 234, the RoC has powers to call for any information or explanation from a company.
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