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The first installment of scheduled pay-out at the crisis – ridden National Spot Exchange Ltd (NSEL) faced around 48 per cent deficit in pay-in by borrowers with the exchange received only Rs 92.12 crore until Tuesday evening.
NSEL in its settlement plan submitted to the Forward Markets Commission (FMC) had committed a pay-out of Rs 174.72 crore to investors as on same date.
While clients of Indian Bullion Markets Association (IBMA) received the highest sum of Rs 19.17 crore, Anand Rathi, India Infoline Commodities, Geojit Comtrade, Systematics Commodities and Motilal Oswal Commodities received a sum of Rs 10.49 crore, 5.34 crore, Rs 5.13 crore, Rs 4.54 crore, and Rs 4.30 crore respectively.
The exchange said in a statement that it has deposited Rs 3.60 crore in the account of the public sector MMTC Ltd.
The remaining amount was distributed proportionately among exchange members as per FMC order.
Meanwhile, failing to achieve the target, the board of the beleaguered exchange has removed Anjani Sinha, MD and CEO of the exchange along with his top management and initiated an enquiry into the entire episode. Sinha, however, has been appointed as Special Officer for assisting in recovery process.
Top head of departments in the management including chief financial officer Shashidhar Kotian were also relieved. They, however, have been held responsible for recovery along with Sinha.
P R Ramesh has been appointed as Officer on Special Duty to exercise all powers of a CEO and will report to the board directly.
The exchange has appointed SGS to assess the quantity and quality of goods lying in various warehouses. We expect this work to be over by end of the month, the exchange statement said.
The exchange will take necessary legal and regulatory measures in case of any non-compliance with the collaterals lying in various warehouses.
The exchange is appointing by August 23 a well-known global audit firm for forensic audit as per the directive of the FMC to assess the exchange, members financial and settlement accounts, including the delivery and collateral management system.
Earlier in the day, the FMC asked NSEL to distribute the amount proportionately among members including the IBMA with certain conditions.
Showing unhappiness with the pay-in, NSEL Investors Forum threatened a legal action against NSEL next week.
“We declare the exchange as defaulter. We are looking for legal opinion. We may file a suit against the exchange and the promoter Jignesh Shah next week,” said Sharad Kumar Saraf, chairman of the Forum.
Supporting his views, Motilal Oswal, chairman and managing director of Motilal Oswal, said, “The government agency should trail the money whether the borrowers have invested in some long term projects and recover it. Also, commodities lying in exchange warehouses should be auctioned to recover the money. If that is insufficient then the property of the borrowers should be attached to pay investors’ fund.”
“The MD and CEO is a very small fish in the ocean. The entire board should have been sacked. The promoter of the exchange has been exposed after three weeks of fooling investors. An independent committee under the aegis of the government should be appointed to investigate the whole issue thoroughly. It is a big scam. The government should look into it seriously,” Oswal said.
