Bombay HC sets up panel for forensic audit of NSEL

The Bombay High Court, on Tuesday, formed a committee headed by a retired high court judge to conduct a forensic audit of the troubled National Spot Exchange Ltd (NSEL) and liquidate the assets of its defaulting borrowers.

The three-member committee, headed by Justice (Retd) V C Daga, will also have a solicitor and a chartered accountant, according to advocate Ameet Naik, who represents NSEL in the case.

The committee will ascertain the liability that is outstanding against the over Rs5,500 crore payments due from the defaulting borrowers of NSEL, conduct a forensic audit, and monetise the assets, the court said in its order.

The committee will ascertain the assets of the company, determine where the amount has gone and return the assets of the duped investors as directed by the court.

Justice S C Gupte of the high court said the assets attached by the Enforcement Directorate and sold subsequently will not come under the panel's recovery proceedings and it would need separate directions from the court to access the assets that have been attached by the Economic Offences Wing of Mumbai police and the Income Tax Department in the NSEL fraud.

Justice Gupte announced the setting up of the committee while hearing a representative suit filed by Modern India Ltd, one of the major investors in the bourse, against NSEL and its promoters.

Before any mutual settlement between NSEL and the borrowers, the committee will give a notice to the Forward Markets Commission (FMC) of such a settlement, and also inform the court about it, the HC order said.

The high court has also allowed the investors or any aggrieved person to challenge the decision of the committee before it.