There's a fresh twist in the five-year-old alleged Rs 5,600 crore National Spot Exchange Ltd (NSEL) scam. The commodities exchange promoted by the Jignesh Shah-led Financial Technologies India Ltd (FTIL) - now known as 63 Moons Technologies - was accused of executing illegal forward contracts along with commodity spot trading and running a Ponzi scheme. Yesterday, the parent company informed the exchanges that it intends to slap Rs 10,000 crore damage suits on former Finance Minister P Chidambaram, Ramesh Abhishek, then Forwards Markets Commission (FMC) Chairman, and former Additional Secretary in Finance Ministry KP Krishnan.
"Despite the fact that there is no money trail traced to NSEL, 63 moons and its founder, by multiple investigative agencies, the group has been singularly targeted as part of a conspiracy. On account of these malicious actions perpetrated against the company, a damage of Rs 10,000 crore has been caused to its shareholders," the company said in a statement today, adding that the "hounding" of 63 Moons also caused "irreversible damage to the entire exchange eco-system, the existing jobs and creation of new jobs". The suits will be filed in the Bombay High Court.
According to Venkat Chary, Chairman of 63 Moons, the company has taken "serious note" of the "proactive roles" played by these three individuals in "perpetrating the crisis, destroying the exchange ecosystem created by the company [NSEL] in order to favour the competitor", that is the National Stock Exchange (NSE).
"As a result, the company has decided to file damage suits of Rs 10,000 crore against Mr P Chidambaram and others, in their individual capacities for taking mala fide actions against 63 Moons by abusing their powers," read the statement. "Notably, the company has already filed criminal complaints against these three individuals with the CBI along with supporting materials."
The NSEL scam became public in July 2013, when Chidambaram was the finance minister. At a press conference, Chary alleged that Chidambaram had approved a note by Krishnan forcing other co-promoters of commodity bourse NCDEX to sell their stake to make NSE a lead promoter thereby revealing their "interference" in the competition within the exchange industry. He further alleged that the FMC under Abhishek was "aware of the role of brokers and traders but acted in a partisan manner only against NSEL and its parent company".
While FMC has since been merged with markets regulator SEBI, Abhishek is presently Secretary of the Department for Promotion of Industry and Internal Trade (DPIIT) and Krishnan is currently the Skill Development and Entrepreneurship Secretary.
Talking to reporters, Shah, founder of erstwhile FTIL, alleged that the NSEL drama was "a conspiracy to destroy the FTIL Group". He added that of the Rs 5,600 crore involved in the exchange's payment crisis, Rs 600 crore has already been paid to genuine investors, while decree has been obtained for about Rs 3,600 crore, which has to be executed, and another Rs 1,000 crore is in the pipeline.
Meanwhile, the Serious Fraud Investigation Office last month got a nod from the corporate affairs ministry to prosecute 71 individuals and 17 defaulting companies in the case. "From the investigation made so far it has clearly been established that the entire money-trail has been traced to 22 defaulting members of NSEL. Thus, the liability for the default amount has been crystalized," the company claimed.
Reacting to the new legal twist, 63 Moon's stock surged 10 per cent in early trade today and is currently trading at Rs 75.65 apiece, up over 6 per cent since the last close.
With PTI inputs
(Edited by Sushmita Choudhury Agarwal)