Powerful traders, who indulged in malpractices, neither have any fear of the FMC, nor are they bothered by the fine that can be imposed upon them, which has caused irregulatities of about Rs4,000 crore, the parliamentary panel said
Nagpur: A Parliamentary Committee on Food, Consumer Affairs and Public Distribution, headed by Vilas Muttemwar, Congress MP from the city, has recommended a CBI probe into alleged irregularities and malpractices in the national and regional commodity exchanges across the country, reports PTI.
The standing committee, which placed its 18th report in the Parliament last week, said that those powerful traders, who indulged in malpractices, neither have any fear of the Forward Market Commission (FMC), nor are they bothered by the fine that can be imposed upon them.
"Therefore, The committee recommended that the FMC should seriously consider that cases of malpractices noticed in the national and regional commodity exchange should be handed over to the CBI for proper and thorough investigation, which will help in bringing offendeRsto justice," Muttemwar told PTI.
Sources close to the standing committee said that the alleged irregularities and malpractices is to the tune of nearly Rs4,000 crore.
Mr Muttemwar, who is also the AICC general secretary, said that despite the regulatory mechanism in the FMC in place, there were reported cases of trading irregularities and market manipulations.
The standing committee received complaints in December 2010 regarding the irregularities in National Multi Commodity Exchange (NMCE), Ahmedabad and was investigated and certain malpractices of the anchor promoter of NMCE were detected.
In its report, the Muttemwar Panel said that after the malpractices were detected, appropriate directions were given to the Board of Exchange for taking further steps as per the law. Recently, the FMC barred five brokers for a period of one year for allegedly indulging in irregularities in guar gum and guar seed trade that led to two-fold price rise since November 2011.
FMC, under the aegis of Consumer Affairs Ministry oversees the functioning of five national and 16 regional exchanges. The combined turnover of the commodity exchanges is to the tune of Rs181.26 lakh crore, which is 52% higher than the last fiscal.
Committee sources further said that four known companies are invovled in the scam running into more than Rs4,000 crore. The report said that about 4,490 traders minted money and about 9,254 suffered losses. These companies manipulated prices up and down between October 2011 and March this year.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
Fiercely independent and pro-consumer information on personal finance.
1-year online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
Fiercely independent and pro-consumer information on personal finance.
Complete access to Moneylife archives since inception ( till the date of your subscription )
