NSEL crisis: Role of directors under Corporate Affairs Ministry scanner, says report

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

The continuing crisis at the bourse, which is a part of the Jignesh Shah-promoted Financial Technologies group, has already seen significant fallout with some arrests and rejig at the boards and few 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.

They also said the ministry would be looking at whether NSEL and other entities violated the Companies Law.

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

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

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

The bourse has come under the scanner of multiple agencies, including the economic offences wing of Mumbai Police.

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