 "NSEL to bring defaulters' auditors under scanner")
The crisis-hit National Spot Exchange has decided to bring to book the statutory auditors of its defaulter borrowers.
According to the Financial Technologies-promoted spot exchange, borrowers raised money through the exchange’s platform using non-existent commodities as a pledge and their auditors have not raised this issue.
The exchange plans to petition the high court here in this regard, since it feels the auditors ought to have noticed discrepancies in the book of accounts.
NSEL has also written to banks, asking them not to grant credits to any of the defaulters. Letters have gone to Axis Bank, HDFC Bank, UCO Bank and Indian Overseas Bank, in their capacities as lenders to the borrowers of NSEL.
Using the NSEL platform, the 24 borrowers raised funds against the stocks they’d deposited in the warehouses. The crisis came to light on 31 July last year, as there was no stocks found in the warehouses.
The court has also allowed NSEL to go ahead with public notices against defaulters, along with photos. There are 24 borrowers which borrowed money from NSEL.
NSEL is also looking at approaching the Supreme Court to appoint an authority to overlook all the court cases to speed the recovery process, said a source. NK Proteins is the largest defaulter so far, with dues of Rs 969.9 crore. The other major defaulters are Lotus Refineries, PD Agro, Aastha Group, Mohan India, Ark Imports and Yathuri Associates.
According to the Financial Technologies-promoted spot exchange, borrowers raised money through the exchange’s platform using non-existent commodities as a pledge and their auditors have not raised this issue.
The exchange plans to petition the high court here in this regard, since it feels the auditors ought to have noticed discrepancies in the book of accounts.
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The Forward Markets Commission, entrusted powers to oversee settlement of the NSEL debts in the Rs 5,574 crore default case, has asked the latter to take steps for recovery of money from the borrowers by filing of police cases and recovery suits against all defaulting members and initiating proceedings under the Negotiable Instruments Act.
NSEL has also written to banks, asking them not to grant credits to any of the defaulters. Letters have gone to Axis Bank, HDFC Bank, UCO Bank and Indian Overseas Bank, in their capacities as lenders to the borrowers of NSEL.
Using the NSEL platform, the 24 borrowers raised funds against the stocks they’d deposited in the warehouses. The crisis came to light on 31 July last year, as there was no stocks found in the warehouses.
The court has also allowed NSEL to go ahead with public notices against defaulters, along with photos. There are 24 borrowers which borrowed money from NSEL.
NSEL is also looking at approaching the Supreme Court to appoint an authority to overlook all the court cases to speed the recovery process, said a source. NK Proteins is the largest defaulter so far, with dues of Rs 969.9 crore. The other major defaulters are Lotus Refineries, PD Agro, Aastha Group, Mohan India, Ark Imports and Yathuri Associates.