NSEL Defaulters assured to pay back in a phased manner in a meeting with Ramesh Abhishek on 4th Aug 2013. Even after no assistance from defaulters, no actions were taken for disgorging defaulters assets.

1. FINAL VERDICT

2. Introduction
 The note by KP Krishnan, then Jt secretary in Dept of Economic
Affairs (DEA), sourced through an RTI query, shows the
government’s interest in helping National Stock Exchange
 It states that “the immediate need for this arises from desire to
revive NCDEX which must be done as early as possible so to
provide credible competition to MCX”
 At the time of this note, neither MCX nor NCDEX were within
the regulatory purview of Krishnan or the ministry of finance
 It is surprising why Krishnan went beyond his jurisdiction

3. Powerplay
 Finance minister Chidambaram and minister of Consumer
Affairs Sharad Pawar conferred converging regulators
 Its about financial & commodity markets into a single entity as
it lead to the end of FTIL from October 2004 which is quite
unlike global trend having separate regulators for both
 Opposition from Pawar was clearly stated as agricultural
commodities came under his ministry
 Pawar managed to keep commodities markets out of
Chidambaram’s reach with his political power

4. Exemption
 FMC reported to MCA about violation by NSEL, without
checking the validity of earlier general exemption granted
to spot exchanges
 In spite of NSEL’s explanation in February 2012, FMC sent
a letter to the DCA on April 10, 2012, stating that NSEL had
breached conditions of the exemption notification
 The reason behind it was upon MCA to take action against
NSEL

5. Abrupt actions
 After a year on 12th July 2013, FMC chairman Ramesh
Abhishek pushed MCA to direct NSEL to stop launching
any new contracts
 It made it difficult for trading clients and members
 On the other side NCDEX spot exchange continued to
function
 FMC wrote a letter afterwards to MCA about closing
NSEL abruptly without checking legal validity

6. No action against Defaulters
 Defaulters assured to pay back in a phased manner in a
meeting with Ramesh Abhishek on 4th Aug 2013
 Even after no assistance from defaulters, no actions were
taken for disgorging defaulters assets
 They should have chased only 7-10 defaulting entities and
solved the crisis

7. Why Amalgamation is wrong
 MCA is invoking Section 396 despite the matter pending
for hearing
 It has not given FTIL’s stakeholders an audience despite
MCA promising to do so in the High Court
 It has also ignored its own circular that sets out
guidelines for amalgamation is the reason behind
proposed amalgamation is wrong
 It is not in public interest as it is favor of 63,000
shareholders of FTIL against the purported number of
13,000 trading clients on NSEL platform

8. Circumstances to stop Amalgamation
 FTIL is providing financial support to NSEL and it will
continue in future
 NSEL has 57 full-time staff of which 18 are senior
management, who are working towards recovery from
defaulters
 NSEL is in process of slow recovery as per records but
86.27 percent of default amount has been secured for
recovery through decrees from Bombay High Court and
injunctions from other courts