The Madras High Court today directed the Centre and stock market regulator SEBI to consider a representation seeking investigation into alleged misuse of National Spot Exchange Limited (NSEL) by some brokers during 2009-13, causing a loss of Rs 5,600 crore to over 13,000 traders.
A bench of Justices C T Selvam and A M Basheer Ahamed of the Madurai bench of the high court gave the interim order on a PIL filed by trader Paul Pandi, who claimed that the misuse surfaced during an audit but no further action had been taken by the Ministry of Corporate Affairs and the Securities Exchange Board of India (SEBI).
He sought a direction to the ministry and the SEBI to conduct an investigation and take further action based on the audit report.
"It is appropriate to place on record our concern given the magnitude of wrongdoing detected to the tune of Rs 5,600 crore and direct the Corporate Affairs Department and SEBI to consider the representation and investigate the alleged wrongdoing," it said.
According to the PIL, the exchange was used to carry out financial dealings instead of commodity transactions during 2009-13.
The petitioner said 24 named and other unnamed brokers were involved in the wrongdoing which was found due to an audit by a firm.
The audit was conducted by the Forward Marketing Commission, which had been merged with SEBI.
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Though the audit findings had been taken to the notice of SEBI, no action had been taken against the brokers involved in the wrongdoing, he said.
The petitioner submitted that he had sent a representation in February this year to the Corporate Affairs Ministry and the SEBI seeking an investigation and action against the traders.
The judges posted the matter to August 13 with a direction to the respondents to file their counter or the status report regarding the investigation.