FMC asks NSEL to file recovery suits against all defaulters

So far only 2 members have paid dues fully, 22 still defaulting

Concerned over the slow pace of recovery of money from NSEL defaulters, regulator Forward Markets Commision (FMC) has asked the crisis-hit commodity spot exchange to strengthen its recovery team and file suits in this regard against all defaulting members.

National Spot Exchange Ltd (NSEL), a subsidiary of the Jignesh Shah-led Financial Technologies India Ltd, has recovered about Rs 356.39 crore of dues from defaulting members out of the total outstanding amount of Rs 5,689 crore

Out of 24 defaulters, only two members have paid fully, while the rest 22 members are still defaulting on payments.

At a recent meeting with NSEL management and Monitoring and Auction Committee, FMC reviewed the recovery of dues from defaulters and asked NSEL to fasten the process and file the suits for realisation of money.

FMC said: "NSEL assured that they would take steps such as strengthening the recovery team at NSEL, filing of FIR and recovery suits against all defaulting members."

The exchange also said it will initiate proceedings under section 138 of Negotiable Instruments Act against defaulters and pursue the matters relating to realisation of funds from cooperative firm NAFED and VAT related issues, the regulator said in a statement.

NSEL has been grappling with a payment crisis since suspending trade in July last year following a government order. Multiple agencies are probing the NSEL's activities and assets of defaulters have also been attached.

The exchange has also sought the intervention of state governments to recover the dues from defaulters.