NEW DELHI, May 8: A parliamentary panel has said that connivance of policy manipulation by sector regulator and officials has led to total monopoly of the short-term electricity market by Indian Energy Exchange Ltd (IEX).
“The committee feels that due to manipulation and non-transparency, 97 per cent trade is going to only one power exchange that is, IEX. All the authorities concerned, including Central Electricity Regulatory Commission ( CERC), state regulators and officials concerned, have either ignored or allowed themselves to be used for such monopolistic hegemony,” said the Standing Committee on Energy in its recent report titled, “Evaluation of Role, Performance and Functioning of the Power Exchange”.
Jignesh Shah-led Financial Technologies India Ltd (FTIL) was one of the promoters of IEX. After Mr Shah was arrested in 2014 for the alleged role in Rs 5,600 crore-scam in National Spot Exchange Ltd, FTIL was forced by the CERC to sell off its 25.64 per cent stake in IEX. FTIL exited IEX in November 2015.In this context, Kirit Somaiya-chaired panel has questioned why Jignesh Shah and FTIL were allowed to maintain control of IEX after the NSEL scam was busted in 2014.
“The committee is shocked as to how a scam ridden company and promoter of FTIL/NSEL/IEX, who is debarred from all the positions and from participation in the activities of the exchange have been allowed to continue with the control of IEX till 2015,” it said. Based on its discussion with stakeholders, the panel has also concluded that there should be at least two well-functioning power exchanges in the country. India has just two power exchanges as of now.
While IEX commands 97 per cent of short-term power market, the other exchange, Power Exchange of India Ltd, holds the remaining balance. Noting the legal wrangling between CERC and stock market watchdog SEBI over regulatory jurisdiction of power exchanges, the panel has suggested that the ministries of power and finance should “sort out this issue amicably in the larger interest of the sector.” (UNI)
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