Corporate Governance Project on NSEL ( National Spot Exchange Ltd. ) Scam.

1. CORPORATE GOVERNANCE
NSEL CRISIS

2. NATIONAL SPOT EXCHANGE LIMITED
 INTRODUCTION
 JOINT VENTURE BETWEEN FTIL AND NAFED
 COMMENCEMENT – 15TH OCTOBER’2008
 HEADQUARTERS:MUMBAI

3. THE NSEL CRISIS - BEGINNING
 5600 crore rupees scam!!!
 An outreach in 16 states trading in 52
commodities
 What triggered the scam?
 - permission to retrade without taking delivery of
goods

4. NSEL CRISIS – WHAT WENT WRONG?

5. THE PROBE
 31st july 2013 NSEL was stopped from carrying
out new contracts
 Investors protested on 28th august 2013
 Filing of FIR by PANKAJ RAMNARESH SARAF
AGAINST NSEL
 ACTION BY ECONOMIC OFFENCE WING

6. FURTHER STEPS
 POLICE ARREST OF MD ANJANI SINHA
,ASSISSTANT VICE PRESIDENT AMIT MUKHERJEE
AND OTHER BORROWERS
 ATTACHMENT OF PROPERTY OF DEFAULTERS
 FUDGING OF DOCUMENTS BY NSEL OFFICIALS

7. SETTLEMENT OF DEFAULTERS
 ATTACHMENT OF ASSETS OF DEFAULTERS
 MAJOR DEFAULTERS-
 MOHAN INDIA
 VIMLA AGROTECH
 SWASTIK
 ARK IMPORTS
 90% OF 5660 CRORES CLAIMED TO BE
RECOVERED

8. CORPORATE GOVERNANCE LAPSES
 DUTIES TOWARDS PROTECTION OF INTEREST OF
SHAREHOLDERS
 CORPORATE GOVERNANCE FAILURE -
I. INTEGRITY
II. TRANSPARENCY
III. COMPLIANCE
IV. ETHICS

9. CORPORATE GOVERNANCE LAPSES
 ISSUE OF CONFLICT OF INTEREST
 BREACH OF LAW
 NO DECLARATION OF DEFAULTS
 DISCREPANCIES IN MINUTES
 BLAME GAME AND RESIGNATION BY DIRECTORS

10. ROLE OF MINISTRY OF CONSUMER AFFAIRS,FMC
 DELAYED ACTION
 POLITICAL MANUEVERING
 BLAME GAME BY AUTHORITIES
 DENIAL BY FMC

11.  ROLE OF FORENSIC AUDITORS
 - INSUFFICIENT CO-OPERATION BY NSEL
 - NSEL MCX IBMA FTL – WORKING IN TANDEM
 ROLE OF PROMOTERS

12. EFFECTS OF THE SCAM
 DERAILING OF THE COMMODITIES MARKET
 EROSION OF INVESTOR CONFIDENCE
 LIQUIDATION BY RETAIL AND INSTITUTIONAL
PLAYERS

13. MINIMIZATION OF IMPACT BY SEBI
 Renewal of license
 Introduction of a new committee
 Seizure of some operational powers of NSEL

14. THANKYOU