Mumbai, Nov 28: The National Company Law Tribunal (NCLT), Mumbai, has sanctioned the Composite Scheme of Arrangement (One-Time Settlement or OTS) between National Spot Exchange Limited (NSEL) and its Specified Creditors, concluding a complex legal battle that began with the commodity exchange's payment default in 2013.
Tribunal Approves Rs 1,950 Crore Payout to Specified Creditors
The NCLT order, pronounced on Friday, has approved the settlement, which will provide a pay-out of Rs 1,950 crores towards the full and final satisfaction of claims for the specified creditors. The scheme was approved by a majority of creditors.
Scheme Addresses 2013 Payment Default Worth Over Rs 5,400 Crore
The approved scheme addresses the massive payment default of approximately Rs 5,402.71 crores from August 2013.
Minimum 41.94% Recovery Ensured; Over 91% Creditors Supported Scheme
As per the claim details, “The value of claims held by the 5,682 Specified Creditors is estimated at Rs 4,607.65 crores (or Rs 4,650 crores subject to reconciliation). The scheme guarantees a minimum pay-out of 41.94% of the claim amount to each specified creditor. Further, the proposal received substantial approval, with the scheme being ratified by a majority of 91.35% in value of claims of the Specified Creditors. The NSEL Investors Forum (NIF) filed an affidavit strongly supporting the scheme, stating it ensures substantial recovery and brings certainty to a dispute that has persisted for over 12 years.”
Role of 63 Moons and Legal Implications
The scheme involves NSEL's holding company, 63 Moons Technologies Ltd. (“63 moons”), formalizing its financial commitment, the order copy reads.
The copy further says that upon settlement, the scheme provides for the assignment of all specified creditors’ claims in favour of 63 Moons, which is effectively assuming the financial burden and the risk of future recovery from the defaulters.
“The arrangement contemplates the withdrawal of cases filed by the specified creditors against NSEL and 63 Moons, along with the release of attached properties, subject to securing necessary directions from the respective courts or authorities.”
Statutory Objections Overruled
The scheme faced objections from various statutory authorities, including the Enforcement Directorate (ED), the Serious Fraud Investigation Office (SFIO), and the Economic Offences Wing (EOW).
The NCLT, while sanctioning the scheme as a collective commercial bargain approved by a majority, clarified that the civil arrangement does not in any manner affect, compromise, or quash any pending criminal or statutory proceedings.
Criminal Proceedings Will Continue Independently
The Tribunal further emphasised that any application for closure of criminal proceedings, as provided in the scheme, remains dependent on the discretion and orders of the respective competent courts or authorities.
NSEL Calls Order a ‘Historic One-Time Settlement’
Meanwhile, NSEL in its press note issued has called this order NSEL’s historic One-Time Settlement.
Mr. Neeraj Sharma, MD & CEO of NSEL, said, “This would not have been possible without the positive approach of the present BJP Government (Central & State) in resolving the crisis, which was not resolved by P. Chidambaram and the UPA 2 government for reasons best known to them.”
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Dr. Sharad Kumar Saraf, Chairman of NSEL Investors’ Forum (NIF), expressed his gratitude for the efforts taken by 63 Moons and NSEL, along with support from the Central and the State Government in getting the closure.”
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