Fails to meet the first payout obligation
A day after being slammed by the Forward Markets Commission (FMC) for providing inaccurate data and doing a shoddy job in assessing the liabilities, the crisis-hit National Spot Exchange Ltd. (NSEL) on Tuesday sacked its entire top management team in a bid to salvage itself from a raging controversy.
NSEL, promoted by Jignesh Shah of Financial Technologies, has defaulted payment of Rs.5,400 crore to investors.
The NSEL board, which met to identify measures to solve the problem on Tuesday, issued marching orders to the current key management team headed by Anjani Sinha, Managing Director and CEO of the exchange.
Mr. Sinha and other heads of departments, including Amit Mukherjee, Assistant Vice-President-Business Development; Jai Bhaukhundi, Assistant Vice-President-Market Operations; Maneesh Chandra Pandey, Manager-Business Development; Santosh Mansingh, Assistant Vice-Presidnet-Market Operations; H. B. Mohanty, Assistant Vice-President-Market Operations; and Shashidhar Kotian, CFO, have been removed from their current assignments, pending an enquiry.
Mr. Sinha has been relinquished from his duty with immediate effect and he will be a Special Officer assisting in the recovery process. The team, which has been removed, will, however, be responsible for the recovery along with Mr. Sinha.
NSEL has also appointed P. R. Ramesh as the Officer on Special Duty (OSD) to exercise all powers of a CEO and he will report directly to the board. Mr. Ramesh comes with a background of over 20 years in legal practice and regulations dealing with exchanges and market participants, NSEL said.
The OSD will also conduct a special investigation to identify various lapses that may have been caused in the operation of the exchange and suggest corrective and consequential actions for recovery of outstanding dues.
The exchange has appointed SGS to assess the quantity and quality of goods lying in various warehouses. “We expect this work to be over by the end of the month. The exchange will take necessary legal and regulatory measures in case of any non-compliance with the collaterals lying in various warehouses,” it said.
NSEL said it was in the process of appointing a global firm for forensic audit as per the directive of the FMC to assess the exchange, members’ financial and settlement accounts, including the delivery and collateral management system. The audit firm will be appointed by Friday.
Meanwhile, NSEL, on Tuesday, failed to meet the first payout obligation.