August 18, 2013 12:51:41 am
Commodity markets regulator Forward Markets Commission (FMC) has for the time being approved National Spot Exchange Ltds (NSEL)plan to settle Rs 5,600 crore in dues.
The regulator has also ordered the appointment of a forensic auditor as it has serious doubt over the credibility of accounts and information given by the exchange.
Crisis-ridden NSEL had submitted the plan to the FMC on August 14 to clear dues to 13,000 investors over a period of seven months.
Noting that NSELs plan does not inspire confidence,the FMC asked the exchange to go ahead with your settlement plan for time being as the payouts are already seriously delayed,which is causing deep anxiety and resentment among the sellers.
FMC,which has been empowered to oversee the settlement process,also came down heavily on NSEL for not taking guarantees for the financial settlement and providing different sets of information at different times.
The credibility of information given and the books of account/records maintained by NSEL have raised serious doubt on its authenticity. You (NSEL),are therefore directed to appoint a forensic auditor firm to establish the credibility of books of account,record maintenance by the exchange in next seven days, the regulator said in a letter to the exchange.
The auditor would have to be appointed with FMCs consent. NSEL has been asked to update the amount deposited in the escrow account on a daily basis to the regulator and on its website.
While the exchange is required to guarantee the settlement of all financial obligations,FMC said that NSEL mentioned in its settlement plan that the dues would be cleared subject to realisation of funds from payers.
As such,the exchange appeared to have disowned its responsibility of guaranteeing the financial settlement. Whereas the exchange has the sole responsibility of settlement of trade on the exchange… It cannot simply depend upon the realisation of pay-in obligation from buyers, FMC said.
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