1,000 clients got some NSEL money back: IIFL

Talking to other brokers, seeking legal advice on spot exchange debacle

As many as 1,021 clients of India Infoline Limited (IIFL), who had invested in the National Spot Exchange (NSEL), have received at least part of their dues, IIFL said.

The company had 1,653 clients with total exposure of Rs 326.24 crore to NSEL. Of these, 154 have received all their money back while 867 received half of their investment as on September 30. This leaves 1,499 customers with a total exposure of Rs 293.26 crore.

In August, the exchange had announced 608 small investors with total dues of Rs 2 lakh or less would get all their money back. IIFL is in touch with other brokers to explore legal options to secure the remainder money, said R Venkataraman, managing director of IIFL. “We have engaged AZB & Partners on the matter.”

Meanwhile, the proportion of IIFL’s revenues from the capital market segment, which includes broking activities, declined in the September quarter.

Total income from operations was up 4.63 per cent on a year-on-year basis to Rs 683.45 crore, up 1.04 per cent over the June quarter. The share of broking business dropped to 12.07 per cent, down from 15.91 per cent in the previous quarter and 20.51 per cent from the September quarter last year.

The company’s fund-based activities account for 74.2 per cent of its total income now, at Rs 506.93 crore, up from 70.6 per cent a year ago. Distribution of financial products such as life insurance and mutual funds accounted for more income than broking. The segment accounted for Rs 91.23 crore or 13.3 per cent of the total income.

R Venkataraman said equity revenues have been under pressure for some time on account of a shift towards options, which have lower brokerage commission. He said recent moves have affected non-equity participation as well.

The consolidated net profit after tax for the September quarter was at Rs 66.37 crore, up 0.8 per cent, year-on-year.

 

The company had 1653 clients who had a total exposure of Rs 326.24 crore to the NSEL payment crises. Of these, 154 have received all their money back while 867 have received half of their investment, as on September 30. This leaves 1499 customers with a total exposure of Rs  293.26 crore. 

 

The exchange had announced in August that 608 small investors, with total outstanding payment of Rs2 lakh or less will get all their money back.
 

An additional 6,380 investors with pending payments of between Rs 2 lakhs and up to Rs 10 lakhs were to receive 50% of their money.

 

A number of entities used the money from these investors as a means of financing their activities and later defaulted on payments. The store of commodities which were to have acted as collateral for the contracts under question, was found to have been non-existent.

 

The Economic Offences Wing of the Mumbai Police has recently made arrests including Nilesh Patel, managing director of NK Proteins -the largest defaulter on the exchange; as well as NSEL’s former chief executive, Anjani Sinha.