ED opposed merger of NSEL with FTIL: FinMin

New Delhi: The Enforcement Directorate (ED) had opposed merger of the crisis-hit National Spot Exchange Ltd (NSEL) with Jignesh Shah-promoted FTIL, saying such a move would impede investigation in the Rs 5,600-crore payment scam, the Finance Ministry said Thursday.

Denying reports that the Revenue Department had tried to help Jignesh Shah by opposing the merger, the Finance Ministry in a statement said the Department had only forwarded this suggestion of ED to the Ministry of Corporate Affairs (MCA).

"On January 20, 2015, ED, which is investigating cases under the Prevention of Money Laundering Act against NSEL, had written to the Department of Revenue that the case was under investigation and it does not seem to be an appropriate time for amalgamation and the same is likely to cause impediment in investigation and prosecution," the statement said.

After obtaining comments of CBDT, the Department of Revenue had forwarded the ED's suggestion to MCA, which had proposed merger in October 2014 to make sure Jignesh Shah-led FTIL also had to share payment default liabilities.

FTIL has over 99 percent stake in NSEL, which faced Rs 5,600 crore payment default at the exchange by 24 non-paying members, impacting over 13,000 investors.

"It is learnt that MCA is proceeding as per law with the amalgamation, which is at the final stage.

"The only role of the Department of Revenue was to forward the suggestion of ED to MCA. It is not unusual that opinions of various departments are placed before the administrative departments dealing with the particular case," the statement said.

The Ministry said any imputation that the Department of Revenue wanted to help any private party is "absolutely incorrect and there is no basis for any such assumption".

The statement comes in response to a report that the then finance secretary Rajiv Mehrishi had objected to the Department of Revenue opposing the MCA's proposal to merge NSEL with FTIL and alleged it was to benefit Jignesh Shah.