The year was 2007, when 63 moons (formerly FTIL) was taking shape of a true multinational company with its Group, MCX, handling 90% of trades across electronic commodity exchanges in India. It built up institutions like the MCX-Stock Exchange (MCX-SX), India Energy Exchange (IEX), NSEL and global exchanges like Singapore Mercantile Exchange (SMX), Dubai Gold and Commodities Exchange (DGCX), Bahrain Financial Exchange (BFX), Global Board of Trade – Mauritius (GBoT) and Bourse Africa.
The spectacular rise of the group allegedly attracted “jealousy” of many high profile bureaucrats, corporates, and a “powerful politician” who has interest in stock markets. They were all waiting for a single chance to hit 63 moons and the NSEL crisis was the opportune time. The Forward Markets Commission (FMC) was then under the purview of the Ministry of Agriculture and Consumer Affairs. While the judiciary is yet to assess who was at fault, confidential documents accessed through an RTI indicate that the crisis was a conspiracy carefully crafted by some bureaucrats and market competitors. The documents also depict undue interest of KP Krishnan, the then Joint Secretary in the Ministry of Finance, in the National Commodity & Derivatives Exchange Limited (NCDEX). An article, as published in Bureaucracy Today in 2015, states that the RTI reveals Krishnan was in correspondence with the National Stock Exchange (NSE), the promoter of NCDEX. He wrote a letter to the government sharing his plans of giving the NSE an additional shareholding in the NCDEX at the cost of government subsidiaries. At the time when Krishnan wrote this letter, neither the MCX nor the NCDEX was within the regulatory purview of his department or the Ministry of Finance. Both these exchanges were regulated by the FMC, which fell in the preview of the Ministry of Consumer Affairs (MCA). This makes it even more surprising as to why did Krishnan go beyond his jurisdiction and initiate such a proposal clearly favoring the NSE. In July 2012, the MCX got to know about Krishnan’s letter favoring NCDEX following which it moved the Central Vigilance Commission against him. Krishnan was subsequently shunted to a side-posting in September 2012, which further fuelled his grudge against the MCX. Ten months after his posting, Krishnan returned to the Ministry of Finance in July 2013. On the very day of his joining, the Department of Consumer Affairs ordered the NSEL to stop issuing fresh contracts, which brought all the trading to a sudden halt. This was done despite the NSEL clarified its position on the contracts and explaining the MCA that any abrupt halt would lead to a crisis and chaos on the exchange. Krishnan and his associates started pursuing the NSEL crisis with a feeling of revenge now. The Ministry of Finance took over the control of the FMC from the MCA. In October 2013, the FMC lodged an FIR against Jignesh Shah in the Economic Offence Wing (EOW). The FMC passed an order in December 2013 declaring that Shah and 63 moons are “Not Fit and Proper” to run any exchange, forcing their abrupt exit from exchanges in India and abroad. Furthermore, on the recommendation of the FMC, the Ministry of Corporate Affairs initiated a move in October 2014 for a merger of NSEL with 63 moons. Although October 17-19, 2014 were holidays, the otherwise “lazy and laid back” government officials worked throughout this period to collate information to draft the merger order as Krishnan was to leave the Finance Ministry on October 20 owing to his transfer. He is now the Additional Secretary in the Department of Land Resources. The urgency shown by the MCA in processing the draft merger order after the FMC’s recommendation raises eyebrows behind the ill-brained motives. While we still hope for justice and fair play in the sub-judice NSEL crisis, only time will tell if justice prevails. Reference :ShantanuGuha Ray:(2016): ‘The Target’: New Delhi: Publisher: Authors Upfront
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