Mops up only Rs 8.50 cr till Friday, the last day for pay-in, against the pay-out of Rs 175 cr to be made on Tuesday
Mumbai : The beleaguered National Spot Exchange Ltd (NSEL) is expected to face a payment crisis yet again as it managed to collect only Rs 8.50 crore till Friday – the last day for pay-in, against the pay-out of Rs 175 crore to be made on Tuesday.
For the first settlement, the exchange could mop up only Rs 92 crore which has been distributed among investors. There was a shortfall of Rs 82 crore.
“We have asked NSEL to sell stocks and recover the money. We are still evaluating concerted action against the exchange,” BSE Brokers Forum official Alok Churiwala told PTI.
Task Force members of Delhi Brokers Association also met on Saturday evening to decide the future course of action, Delhi Stock Exchange Executive Director B K Sabharwal said.
Two days after the Forward Markets Commission directed the NSEL to take punitive action against those who defaulted on payment for claim settlement, the exchange declared nine members — ARK Imports Pvt Ltd, Loil Overseas Foods Ltd, Lotus Refineries Pvt Ltd, N K Proteins Ltd, NCS Sugars Ltd, Spin Cot Textiles Pvt Ltd, Tavishi Enterprises Pvt Ltd, Vimladevi Agrotech Ltd and Yathuri Associates — as defaulters on Friday. These members had failed to meet their financial commitment for the first settlement dated August 20, 2013.
NSEL, promoted by Jignesh Shah-headed Financial Technologies India Ltd, is engulfed in a crisis after it suspended trading on July 31, raising concerns about possible default of Rs 5,600 crore due to investors, including 7,000 small investors.
Meanwhile, stock exchanges have decided to bar defaulters, who caused Rs 5,500-crore payment crisis at NSEL, from all trading activities as per direction from Securities and Exchange Board of India (Sebi) in the latest crackdown against such entities.
While action has been initiated against nine defaulters so far, more entities would face similar fate if they fail to pay the money owed by them to NSEL investors, officials at stock exchanges told PTI.
Three of these entities — Loil Overseas Foods, N K Proteins and NCS Sugars — are registered as clients of BSE’s trading members and the exchange has decided to disable the Unique Client Codes of these three entities.
Sebi is already probing various aspects of NSEL crisis, including the role of some brokers for possible mis-selling of forward contracts at the spot exchange in violation of regulations related to portfolio management services and prevention of fraudulent and unfair trade practices. It is also suspected that some brokers might have diverted clients’ funds to take positions on NSEL, while their roles are also being probed for possible collusion with persons with insider information for trading in the shares of two listed group entities — Financial Technologies (FTIL) and Multi Commodity Exchange (MCX).
NSEL was set up to provide an electronic platform to farmers and others for spot market trading in agriculture and other commodities, but it later emerged that some short- duration forward contracts were also being traded there.