NSEL questions validity of 13,000 'investors'

Various investors' bodies have repeatedly put the total clients' number at 13,000, a figure noted in various court hearings. The number was also quoted by the regulator, FMC

The scam-hit National Spot Exchange (NSEL) has questioned the authenticity of 13,000 numbers of investors with it as claimed by various forums.

“We have contractual relations with just 156 trading clients. Also, we sought clients’ information (know your clients or KYC) from our trading members to establish the real beneficiary of the Rs 179 crore we disbursed into the accounts of NSEL members. But, we got confirmed details of only 3,600-odd clients,” said S Rajendran, independent non-executive director on the exchange's board.

Various investors’ bodies have repeatedly put the total clients’ number at 13,000, a figure noted in various court hearings. The number was also quoted by the regulator, Forward Markets Commission.

“Traders are saying, why should we tender details of our trading clients? We tried taking help from the high court-appointed committee. But, our trading members are denying details,” alleged Rajendran.

According to Prakash Chaturvedi, joint managing director, of the Rs 179 crore paid to NSEL as a bridge loan last year to pay small investors (100 per cent for receivables up to Rs 2 lakh and 50 per cent with receivables between Rs 2 and 10 lakh), NSEL has been able to ascertain payment of only Rs 92 crore.

“We have been seeking KYC details from our trading members, that were also denied. We are fully responsible for paying all dues to our members but only as and when we get money,” said Chaturvedi. NSEL's promoter, Financial Technologies (India), has made an overall loan of Rs 225 crore to NSEL, including the bridge loan of Rs 179 crore.