How can private promoters use 'National' and other generic words for company names?

The Financial Technologies group has always managed to get generic words as company names, with Registrars violating their own guidelines. Use of words like ‘National’ for National Spot Exchange are illegal too

The National Spot Exchange Limited (NSEL) scam is unusual in many ways. First, people were lured into participating in risky ready-forward or financing transactions because of the illusion of adequate regulation, supervision, trade guarantees and all the safeguards claimed by modern bourses. Each one has turned out to be a lie. As we’ve said elsewhere, the ministry of consumer affairs (MCon), which has no regulatory framework to supervise any exchange, allowed NSEL to be set up by a simple, bureaucratic exemption. MCon’s website has a page on the rules governing the use of emblems and names, as specified by statute. This clearly says that nobody but a government entity can use words like ‘National’ and ‘Indian’. Anyone who has tried to register a company knows that these words, as well as a combination of generic words (like those on the website: Institute of Mass Communication), are rejected outright.

So how is it that Jignesh Shah’s Financial Technology group as well as all the commodity futures bourses under the ministry get these names in violation of the statutes? Did none of the politicians and bureaucrats on the boards of these entities notice the names or the effort that would be required to have them cleared? The name National Spot Exchange Limited clearly creates the impression that it is a public sector entity, like the National Stock Exchange (NSE) was, when it was started. This is no longer true today. The FT-MCX group was allowed to use the word ‘national’ even though it is entirely a private sector entity.

That is not all. How was it again granted the use of the word ‘national’ for the National Bulk Handling Corporation Limited which is a private entity? The name makes it appear similar to the government-owned Central Warehousing Corporation. Wasn’t this a deliberate attempt to mislead people in the commodity markets? The FT group also has the Indian Energy Exchange—another private sector bourse that has been allowed the use of a name that clearly violates the names and emblems statute.

The statute to prevent the misuse of names and emblems was enacted far back, in 1950, specifically to stop such attempts at confusion. It is unclear who monitors the use and misuse of these names, but the act of granting registration to these names is clearly done by various registrars of companies (RoCs), under the ministry of corporate affairs. Will they be asked to pay a price?
 

Comments
jaideep shirali
8 years ago
Maybe it's a coincidence that these private sector organisations with the national name tag are shady. NSEL is one case, BCCI, an equally unethical body is another prime example. As far as Govt nominee Directors on such bodies are concerned, the lesser said the better, because the facts state the obvious. Of course, it now remains to be seen whether the FT group's equity, debt and other exchanges are regulated in the same way as NSEL. We anyway love to create laws, but enforcement seems the last priority.
nagesh kini
8 years ago
The use such names ought to be banned outright.
Whosoever allowed it under the present dispensation ought to show cause the circumstances under which he accorded the approval - whether any clarification sought from 'higher ups'?
chirag shah
8 years ago
A valid point but raised a little too late.

The words India, Hindustan have been used since time immemorial.

India Glycols, India Cements, Hindustan Construction, Bajaj Hindustan, Hindustan Lever etc.

Sucheta Dalal
Replied to chirag shah comment 8 years ago
Time immemorial????

Or before the Act? Indira Gandhi under FERA allowed some Hindustan... especially when firang companies like Unilever wanted to look India.
No point in an emblems act and long warnings on Ministry of Corporate Affairs as well as Consumer Affairs ... if its not the law. Or dont you think so??
nagesh kini
Replied to Sucheta Dalal comment 8 years ago
There are specific prohibitions on emblems, flag but names like Hindustan as in HUL, India as in India Cements may have gone thru by default. There is nothing stopping the authorities from coming out with clear cut diktats??
Naresh
Replied to nagesh kini comment 8 years ago
Emblems Act, Foreign Exchange Regulation Act, The Boiler Act, The IDBI Act, the LIC Act - well these acts will all go into the dustbin where they rightly belong once political change occurs. The Congress and the UPA have become old, decrepit and outdated in their thinking. The real culprits are the coterie which function below the Gandhi family who are holding back all the reforms. It seems all of these ministers have "weaknesses" which keep each other in check. The markets are thankfully destroying India before these ministers do it. Lets hope we have new leadership in 2014.
zafar qureshi
8 years ago
Jignesh shah is a terrorist and he has buisness links with many terrorist leaders outside the india, i request govt. of india to check his buisness realtions and even sharad has big hand in doing NSEL scam.
Srinivas
8 years ago
At the least, the officer at ROC who approved the name should be sacked ?
Nilesh KAMERKAR
8 years ago
It ought be Notional Spot Exchange Ltd
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