With a solution to the 5-month-old Rs. 5,600 crore NSEL scam still elusive, the Reserve Bank has said it is not advisable to let a single group of shareholders to dominate the functioning of any exchange.
“The (NSEL) episode has emphasised the need for ensuring that no single shareholder or a group of shareholders is permitted to dominate the functioning of the exchange or exercise management control,” the RBI said in its half-yearly Financial Stability Report released today.
The scam, which encircles the Jignesh Shah-led companies, has “revealed certain systemic concerns with regard to ownership and governance arrangements in exchanges and common ownership of exchanges and existing technology platforms.”
The RBI view comes within a fortnight of the sectoral regulator FMC in a report stating that the promoter Shah and promoter company Financial Technologies are not eligible to run the crippled exchange, an order challenged by the group in the Bombay High Court.
The RBI report says the NSEL scam highlighted the gap in the regulation of commodity spot exchanges and added that .
“we need to comprehensively address the problems in commodity spot markets.”
It can be noted that the government on July 30 ordered closure of the NSEL following irregularities, which later revealed that the spot exchange owed a whopping Rs 5,600 crore in dues to thousands of investors and dozens of brokers/ intermediaries.
On December 18, in a severe indictment of the NSEL promoters, commodity market regulator FMC said Shah and his firm Financial Technologies were not ‘fit and proper’ to run any exchange in the country and charged him with being the .
“highest beneficiary” in the NSEL scam.