A Parliamentary panel today sought forensic audit of the shareholding pattern of Indian Energy Exchange (IEX) to check whether Financial Technologies India Ltd (FTIL) holds any stake in the company through cross holding, buy-back arrangement or any other means.
"Implementation/execution of the order of CERC regarding dilution of FTIL share holding in IEX need to checked thoroughly. It is the duty of the (Power) Ministry/Regulator (CERC) to see that no cross holding/holding through share companies/buy back arrangement/control/cross control by promoter of FTIL is allowed in any form," the panel said.
Parliamentary Standing Committee on Energy in its report tabled in Lok Sabha said that, "Forensic audit must be ordered to check such cross control/non-transparent control/share holding of IEX by promoter of FTIL in the IEX."
Central Electricity Regulatory Commission (CERC) is the power sector regulator.
The panel also said that after interaction with a section of stakeholders, it felt monopoly on power exchange should be avoided as this is corrosive to the health functioning of the system.
"The committee is shocked as to how a scam-ridden company and promoter of FTIL/NSEL/IEX, who is debarred from all the positions and form participation in the activities of the exchange, has been allowed to continue with the control of IEX till 2015," it noted.
In the wake of the Rs 5,600-crore scam at National Spot Exchange Ltd (NSEL), CERC had directed FTIL to divest its entire stake in Indian Energy Exchange. FTIL was the promoter of IEX.
The bourse, in November, informed the sectoral regulator that FTIL has completed the stake sale.
The committee said after NSEL scam episode, the experience of all stakeholders, as apprised to the committee, is there should be at least two well functional power exchanges in the market.
The panel was of the view that the Power Ministry, PSUs, regulators and state discoms must play a healthy role to ensure that there is health competition in the power sector.
It observed that ever since the power exchanges came into existence in 2008, the quantum of trading at the exchanges has been between 1 and 3 per cent of the total power generation.
The Parliamentary committee report found that the concept
of healthy and transparent use of the power exchanges as a trading platform in India is yet to begin.
It also noted the rate of power are manipulated and are shown as market determined. The same are used to fix the power price to be payable by consumers. This is nothing but abuse of the concept of power exchanges as an open and efficient platform.
The said: "...Due to manipulation and non-transparency, 97 per cent trade is going to one power exchange i.E. IEX. All authorities concerned, including CERC, state regulators and officials concerned, have either or allowed themselves to be used for such monopolistic hegemony."
It also said government should come out with total clarity on the conflict between CERC and SEBI regarding controlling of power/commodity exchange and ministries of power and finance should settle the issue amicably in larger interest the sector.
The committee also recommended that the determination of tariff of electricity by the CERC under various provisions of Electricity Act 2003, should be reviewed.
It suggested the tariff determined by the regulator should reflect the market sentiment and support the market, involving all stakeholders like generators and consumers.
