The Bombay High Court has summoned the chairman of the Forward Markets Commission to appear in the court on May 7 in connection with the liquidation of assets of defaulting borrowers of the National Spot Exchange Limited, which has been hit by a Rs5,600-crore scam.
The HC in its Wednesday's order sought the commodity regulator's stand on selling the attached assets of the borrowers. The court is hearing a suit that seeks to recover Rs5,000 crore at an annual interest of 16 per cent.
The court has also asked the Enforcement Directorate (ED) and the Economic Offences Wing (EOW) of the Mumbai police to allow the defaulting borrowers of NSEL to sell attached assets by consent and bring the money to court.
While the EOW has given its consent to sale of attached assets of the borrowers, sources in ED said the Prevention of Money Laundering Act does not allow for liquidation of assets attached by the agency as they are vested with the Union of India.
Earlier, in an April order, the court in several cases had restrained the major defaulters in the case from disposing of, alienating or creating third party rights in respect of their immovable properties and assets until the final disposal of the suit.
The court also asked defaulters to disclose, on affidavit, all their moveable and immovable assets, properties and assets including bank account details of funds debited and credited , for a minimum period of last three years.
The ED, so far, has issued at least eight provisional attachment orders to three NSEL borrowers—Mohan India Ltd, PD Agro Processors Pvt. Ltd and Aastha Group. So far EOW has attached over 460 properties of defaulting borrowers.
The court, has also set up a three-member panel to recover money in the NSEL case. However, the terms of reference for the committee that is expected to comprise a retired judge, a lawyer and a chartered accountant are yet to be formed. Sources said the committee will act as a an arbitrator between the defaulters and the brokers.
The settlement crisis at NSEL first came to light on 31 July, 2013 when exchange suspended trading in all but its e-series contracts. These, too, were suspended a week later.
On 14 August, NSEL proposed a payout plan, but it has been unable to stick to the schedule and has not made a single successful payout ever since.