It is funny, when things are right; everybody wants to have a piece of the pie. But when things go wrong, nobody wants to take responsibility. NSEL crisis is a one such case. Why? It was a commodity spot exchange, which started in 2008 and was without a regulator till 2013 – now that’s the belief that has been given by SEBI.
Initially, the FMC was designated to monitor and oversee NSEL. It goes without saying that the main purpose of having a governing body is to protect the shareholders in the exchange market. Now, that FMC has merged with SEBI, there seems to be jurisdictional conflict over the NSEL case. While FMC claims it did not regulate the NSEL, it sure did not hesitate in informing the Government that NSEL was apparently violating norms. In fact, it did not hesitate or even think of jurisdictional issues when it was declaring NSEL ‘not fit and proper.’ Now, even if there is a need to take any regulatory action against NSEL, who will be the deciding factor – SEBI or some other agency? Who will decide whether SEBI or some other agency will be regulatory authority of NSEL?
It is shocking that in the aftermath of the crisis, FMC, which is SEBI now, has given up on the crisis. And also, who will take action the brokers and defaulters if none of the governing bodies are monitoring NSEL crisis? I had these questions because I am now on Jignesh Shah’s side, after reading ‘The Target’ by Shantanu Guha Ray. It was raw, gritty and intense. A must read for all!