 "'Sheth brothers, Blackstone beneficiaries of NSEL'")
The forum said that both Sheth brothers and Blackstone were in the complete know ofthe Rs 5600 crore payment crisis erupted at NSEL. In a letter addressed to the chairman of NSEL promoter FinancialTechnologies India Ltd (FTIL), Arun Dalmia, Secretary of the Forum said thatall NSEL investors are being deemed as fools by these large stakeholders of FTIL, namely Ravi Sheth and Bharat Sheth, the promoters of Great EasternShipping and Godrej Foods etc. along with the private equity firm Blackstone Capital have been accruing annual dividends, interim dividends and bonus issues without as much as whispers raising any stink with regards to the expanding investor base and glaring malpractices in NSEL.
Sheth brothers have been one of the earliest investors into FTIL with Ravi Sheth and Bharat Sheth acquiring 5.65% and 3.19% of stake in the company in December 2007. Presently, they hold 5.40% and 2.84% stake in FTIL respectively now. Also Blackstone Capital held 6.12% stake in FTIL in September 2012 which was later increased to 7.02% in March 2013. Dalmia further argued that FTIL held 99.99% stake in NSEL while the remaining 0.01% stake was issued to NAFED in order to createa corporate veil.
As a commodity spot exchange platform, NSEL operated in FTIL premises, relying on software solutions provided by FTIL, operated through the tangible and intangible asset base provided by its parent. Therefore, NSEL as such was merely a trading platform with all its support base entrenched with FTIL. At one point, the annual turnover of FTIL was consisted of 60% of revenues from NSEL. Thus, to ven suggest that NSEL operated as a separate entity independent of FTIL would be akin to livingin a fool's paradise, he added. Dalmia warned that any attempt by FTIL shareholders to vitiate the recovery process for NSEL investors would be met with stiff and consistent resistance from these investors and any bid to takeover or merge FTIL with other big business houses cannot be fructified without take these investors' representative on board.
Interestingly, these three minority shareholders had written to FTIL seeking ouster of Jignesh Shah, the promoter of the company.