Conspiracies by vested interests in the government have always been roadblocks in the development of the country. One such ploy hatched by vested interests was bringing down the FTIL group. ShantanuGuha Ray tries to get deep into the matter in his book ‘The Target Book’. The book is definitely worth a read.
Confidential documents accessed through an RTI indicate that the crisis was a conspiracy carefully crafted by some bureaucrats and market competitors. The documents also depict undue interest of KP Krishnan, the then Joint Secretary in the Ministry of Finance, in the National Commodity & Derivatives Exchange Limited (NCDEX), who went out of his way to create a scenario that would implicate FTIL.
In July 2012, the MCX got to know about Krishnan’s letter favoring NCDEX following which it moved the Central Vigilance Commission against him. Krishnan was subsequently shunted to a side-posting in September 2012, which further fuelled his grudge against the MCX and its promoting company FTIL and its promoter Jignesh Shah. Ten months after his posting, Krishnan returned to the Ministry of Finance in July 2013. On the very day of his joining, the Department of Consumer Affairs ordered the NSEL to stop issuing fresh contracts, which brought all the trading to a sudden halt. This was done despite the NSEL clarified its position on the contracts and explaining the MCA that any abrupt halt would lead to a crisis and chaos on the exchange.
Krishnan and his associates started pursuing the NSEL crisis with a vengeance. The Ministry of Finance took over the control of the FMC from the MCA. In October 2013, the FMC lodged an FIR against Jignesh Shah in the Economic Offence Wing (EOW). The FMC passed an order in December 2013 declaring that Shah and 63 moons are “Not Fit and Proper” to run any exchange, forcing their abrupt exit from exchanges in India and abroad.
Reference –ShantanuGuhaRay:(2016): ‘The Target’: New Delhi: Publisher: AuthorsUpfront
For more information check The Target Book Reviews.