NSEL refutes claims of influencing trading clients

A client had alleged that NSEL joint managing director Prakash Chaturvedi tried influencing him to support the settlement plan of Financial Technologies

The tainted National Spot Exchange Ltd (NSEL) on Tuesday dismissed the claim of a small trading client that NSEL was trying to influence him to support a proposed settlement plan.

The client, Kirit V Sheth, with his payment receivables of less than Rs 1 crore had alleged that NSEL Joint Managing Director Prakash Chaturvedi tried influence him to support the plan in which Financial Technologies (India) (FTIL) had proposed to pay at least 50 per cent to all trading clients in three-four weeks.

“As alleged, Jignesh Shah is not involved in any matter related to NSEL and all recovery efforts are managed by the revamped board of directors of NSEL. Therefore, making an allegation against Shah in this matter is highly motivated and is with a view to divert attention from investigations against brokers,” said Chaturvedi.

NSEL had sought details of trading clients from their respective brokers on receiving the perquisite permission from the Bombay High Court Committee (HCC). Interestingly, brokers had opposed the move.

After several rounds of hearing, the Bombay High Court ordered brokers to provide details of their trading clients. Brokers are perturbed due to the arrest of three members of their fraternity (released on bail later) after NSEL shared trading and other details with the Economic Offences Wing of the Mumbai Police.

Defending his conversation with Sheth as a normal practice, Chaturvedi, said, “There is absolutely no harm if the exchange chooses to communicate to all the regulators and investigating agencies about developments at NSEL, which was found unpalatable to one broker who served a Rs 500-crore defamation notice against NSEL and me as an individual.”

Chaturvedi further said the attempt of the broker is preposterous and ludicrous; and also to browbeat and pressure the exchange officials to silence about the brokers’ part and role in the payment settlement failure.

NSEL has been receiving calls from small trading clients every day to know the progress of the settlement plan.

“Sheth spoke to me on several occasions also beyond NSEL issues. Conversation with Sheth was a normal one, as we did with all trading clients through advertisements in various newspapers. Apart from Sheth, we have spoken to three-four more such clients responding to their queries about the proposed settlement plant. Sheth, however, had claimed that the proposed settlement plan was originally floated by him,” said Chaturvedi.