National spot exchange limited (NSEL), commenced live trading on October 15, 2008, and was the first commodity spot exchange of the country. Currently facing settlement crisis, is new concept of Electronic spot exchange altogether. There was no provision in state APMC act to allow spot exchange to function. It took a lot to explain to state governments how NSEL would be beneficial to the farmers. However, some state have still have not amended their APMC acts.
NSEL is the first electronic spot market to obtain license under APMC Act in Maharashtra, Karnataka, Gujarat, Orissa, and Rajasthan and has carried out trades in all states by enabling farmers to sell their produce to bulk consumers. The NSEL Crisis came to light more than a year ago when the present Defaulters of the Exchange failed to honour their pay-in obligations and Trading Members who traded on behalf of their clients could not receive their dues. After exhaustive investigations by multiple investigating agencies such as the EOW, CBI and ED, the 22 defaulters of the Exchange stand charged for perpetrating the crisis.
The erstwhile management of NSEL led by its MD & CEO Mr. Anjani Sinha has also been booked for being the master mind of the crisis and faced jail time, but, is now out on bail. The 22 NSEL Defaulters spread across the country traded on the Exchange through numerous commodities. But investigations revealed that the funds generated by these companies and their respective management was routed or laundered in some cases to meet nefarious purposes. These Defaulters splurged funds generated on NSEL on acquiring immovable assets such as premium properties, land and immovable luxurious assets. These funds were also used to set up dubious firms and money was laundered out of the country. The investigating agencies at present have attached more than 200 assets of these defaulters and media reports claim them to be worth Rs.6,000 crores in value.
The Bombay High Court has set up a special Committee to dispose off these assets and repay monies owed. A retired Judge Hon VC Daga leads this Committee and it is making speedy progress. Financial Tecnologies India Limited the majority promoter of NSEL crisis is said to be working closely with authorities and investigating agencies to resolve the crisis. Mr. Jignesh Shah, promoter of FTIL was arrested by the Economic Offences Wing (EOW) in 2014 but was released since no evidence of money trail was found to be leading to him after three months of custodial investigation. Recent media reports also suggest that the Ministry of Corporate Affairs under the current NDA Govt. is keen to resolve the crisis at the earliest and has intervened to ensure speedy recovery from the defaulters.