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Mumbai: The Centre, seeking to supersede 63 Moons’ board, has told an appeals court that it would examine the dwindling of a dedicated fund used to square trades on the National Spot Exchange (NSEL) before the mothballed platform was hit by a Rs 5,600-crore scam six years ago.
NSEL is a subsidiary of 63 Moons and its settlement guarantee fund (SGF) had a corpus of Rs 790 crore.
In an affidavit, the Centre also said that it would look into the affairs of a former 63 Moons’ subsidiary NBHC, and find an untainted buyer (for 63 Moons) to replace the original promoter if the NCLAT allowed it to take management control of 63 Moons.
Jignesh Shah is the founder-promoter of 63 Moons.
All these actions could be expedited in 18 months if “management control is granted,” reads the Centre’s affidavit.
The latest affidavit comes after NCLAT asked the corporate affairs ministry to lay down a roadmap for 63 Moons before the tribunal pronounced its verdict.
The NCLAT is slated to take up the matter on Monday.
ET has seen a copy of the affidavit.
The government said that NSEL’s SGF dipped from Rs 790 crore on July 2, 2013 to Rs 62 cr on Aug 5, 2013.
It said that any payment above Rs 25 lakh out of NSEL required prior permission of Jignesh Shah.
A 63 Moons spokesperson said: “Grant Thornton has already looked into the entire SGF utilisation issue and its Supplementary Report of October 2013 clearly states that entire amount in the SGF of NSEL was utilised to meet the pay-out obligations of the members (for which SGF was meant) by 26.07.2013, after which NSEL’s own funds had to be utilised to meet the pay-out obligations of the members.
…Mr (Jignesh) Shah has informed 63 Moons that he has never ever signed or approved even a single payment/cheque of NSEL as he was a non-executive director, (and) not involved in its day-to-day operations.”
The government affidavit said the “entire affair” of NBHC has been a “mystery”.
“Although NSEL stated to the warehousing regulator WDRA that NBHC would do its warehousing, NBHC did not provide warehousing services for NSEL.
After the NSEL crisis broke out, 63 Moons divested its stake in NBHC…..”
The government also said it would investigate the interlinkages among 63 Moons, NBHC and NSEL and that “possible involvement” of group companies needs to be reconstructed with inputs from insiders at 63 Moons.
On this, 63 Moons said: “After the settlement defaults at NSEL, 63 Moons’ shareholding in NBHC has been purchased by reputed third-party investors after a thorough and detailed legal and accounting due diligence of NBHC….”
The government has also sought suspension of rights accruing to Jignesh Shah or his family members as promoters of 63 Moons.
Multiple agencies, such as the Economic Offences Wing of Mumbai police, ED, MCA and SFIO, are investigating the NSEL scam.
“…There is no provision in Indian law that authorises suspension of the rights of shareholders of a listed limited company in the absence of findings of gross illegalities arrived at after a detailed judicial trial,” said the 63 Moons spokesperson.
The Centre moved the tribunal after NCLT Chennai in June last year refused to declare the present board of 63 Moons not fit and proper to be directors, while allowing the Centre to nominate three directors to the company’s board.
The NCLT, however, declared 10 past directors, including Jignesh Shah, unfit to be directors of any company for allegedly failing to exercise due diligence.
Former directors at 63 Moons have challenged the NCLT order.
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