NSEL investors protest outside Financial Technologies office

A sea of white Gandhi-cap wearing investors stood waiting outside the Financial Technologies’ office premises with placards in hand, urging the government to take over National Spot Exchange Ltd (NSEL). Moving in and out of the crowd were a few policemen, there to make sure the situation didn’t go out of hand. Once in a while, a few voices erupted in unison condemning the promoters of the now-tainted NSEL but other than that it is a rather peaceful gathering.

“We are here to only make our voices heard and inform the government about our problems. This is the common man's hard-earned money and there is no account of it now,” said Brijesh Shah, managing director of R K Broking, a franchisee of K R Choksey Securities. The broking firm had invested about Rs 10 crore collected from over 75 retail investors, of which they have only recovered about Rs 3.25 crore. The rest, Shah hopes, will be given back to them by the government. The NSEL payment crisis erupted late in July when the exchange was unable to make payouts to investors. What started as a few glitches in payment snow-balled into a payment default of Rs 5,500-crore to investors, both big and small. The forum held a press conference earlier this month, when it became clear the exchange would be unable to honour the payments, as these were issued against fudged receipts of empty warehouses.

“Earlier, we didn't know what to do but now we know where to go and what to do,” said Sharad Kumar Saraf, chairman of National Spot Exchange Investors Forum, standing outside the exchange office. “We have no experience dealing with something like this, as this is the first time that something like this happened.”

He said as the government had given the licence to set up the exchange, it should share the burden of the loss. “This will cause investors to lose their confidence in all the exchanges in India and also cause foreign investors to pull out of Indian markets.”

A few murmurs here and a few exasperated sighs there showed signs of disenchantment with the whole process. “We know that not much is being done. We don’t even know if the money will ever come back. Of course, we will continue with the protests but what will come of it we are not entirely sure of,” said a broker.

For now, disgruntled investors have a few things to look forward to.

With the protest on, the forum is gearing up for another meeting on Thursday to chart out further course of action. Along with this is a plan to meet the 24 bulk borrowers to convince them to make the payouts.

“We will meet the borrowers in their offices and homes and persuade them to make the payments,” said people from brokerage firm Emkay Global Financial Services gathered outside the Financial Technologies’ office.