 "NSEL complaints against five defaulters for insufficient stocks")
The exchange has filed complaint with the Economic Offence Wing (EOW), the investigating authority, about five defaulters that do not have adequate commodities in their warehouses.
They include: ARK Imports Pvt Ltd, Lotus Refineries Pvt Ltd, N K Proteins Ltd, Vimladevi Agrotech Ltd and Yathuri Associates. They accumulatively hold a total payout due of Rs 2,380.61 crore or over 42% of total payment due for NSEL of Rs 5,600 crore.
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NSEL had declared these nine members as defaulters when the last pay-in was not completed by them on August 16. As per the rules and bye-laws, the exchange has asked these defaulting members to submit their books of accounts and hand-over all the collaterals to it.
“Amongst these nine defaulting members, the exchange has initiated case for investigation against five defaulting members who did not have adequate commodities in the warehouses, which is against the mechanism specified in the exchange circulars. Non-delivery of commodities or its withdrawal is a breach of faith and breach of contractual arrangements,” the exchange said in a statement.
The exchange has also sought details from the remaining four members of the declared defaulters. These defaulters, according to sources, do not allow SGS – the agency appointed by NSEL to carry out quality and quantity inspection – to enter into their warehouses.
They include : LOIL Overseas Foods Ltd, NCS Sugars Ltd, Spin Cot Textiles Pvt LTd and Tavishi Enterprises Pvt Ltd. They accumulatively hold a total payment due of Rs 514.35 crore, around nine percent of total NSEL pay-out dues.
“We will also take similar recourse for other defaulting members who are not cooperating. As informed earlier, the NSEL board has already initiated investigation against the management team and its ex-MD and CEO,” the statement said.
Meanwhile, NSEL Investors Forum, chaired by Sharad Kumar Saraf in a meeting of investors observed that the Forward Markets Commission (FMC), the authority overseeing pay-in and pay-out appointed by the Consumer Affairs Ministry, is not exercising its powers granted by its parent ministry.
“Our investors today felt that FMC is not exercising its powers. It is just overseeing pay-in and pay-out. Hence, we have decided to take further course of actions ourselves. To begin with we will commence a large scale ‘dharna’ before NSEL office on Wednesday followed by complaints to national investigative agencies including Serious fraud investigation office (SFIO), Central Bureau of Investigation (CBI) etc, afterall it is a fraud. We are also exploring legal actions against the company and its promoter,” said Saraf.
Sources said that the Forum has already pleaded with the Securities and Exchange Board of India (SEBI) to suspend trading in Financial Technologies (FTIL) shares.