The Forward Markets Commission (FMC) is likely to impose a trading ban for at least six months on two more Rajasthan–based traders, in addition to similar action taken some days earlier against two others. This follows a probe into irregularities in the trading of guar seed and guar gum, largely on the National Commodity & Derivatives Exchange (NCDEX).
Around three dozen traders and the entities they represented were probed in this regard. Around 30 were let off with a warning and one, it has been decided, should be exonerated. Of the remaining four, two have already been punished, as reported earlier this month.
These are Shresth Commodities & Financial Services Pvt Ltd and Vinod Commodities Ltd. The former is a member of the SCFS, MCX, NCDEX and ICEX; it has been suspended for six months from any trade, including its director, Subhash Jain. The latter is a a member of MCX, NCDEX and ACEL; it has been banned from any trading for a year, as has its director, Vinod Singhvi.
As for the other two, mentioned at the outset here, they made their defence in the second week of January. “We were not convinced with their responses and, hence, decided to suspend them from active participation in commodity trading. The period is being worked out and will be announced soon,” said a senior FMC official.
Besides manipulation of guar seed and guar gum prices, an FMC official said those being proceeded against were also involved in frequent client code modifications.
FMC fears the possibility of margin funding in cases where some industrialists and large traders transfer money into the account of a small person or entity and trade in commodities on the latter’s behalf. The manipulators manage to corner huge quantities of guar gum and seed through different accounts for price rigging, while the person who allows use of his account gets a small sum.
