BJP seeks action on NSEL crisis

Kirit Somaiya tells K V Thomas NSEL has hypothecated or pledged its stocks in fraudulent manner with more than one lender

The main opposition Bhartiya Janata Party (BJP) on Thursday said many public sector units, including MMTC and PEC, have either lost or locked hundreds of crores in the National Spot Exchange Ltd (NSEL) payment crisis, and asked the government to take action against the exchange. Both companies jointly have an exposure of Rs 300 crore to NSEL.

In a meeting with Consumer Affairs Minister K V Thomas on Thursday, Kirit Somaiya, BJP’s national secretary, said NSEL had hypothecated or pledged its stocks in a fraudulent manner with more than one lender. Asking for an independent audit and verification by regulators, Somaiya said the government should take physical charge and possession of documents, stock and register a police complaint against the exchange.

An email sent to MCX and Financial Technologies on the BJP's allegations did not elicit any response till press time.

Somaiya said more than 12,000 small investors and farmers in NSEL are now waiting to get back their investments in NSEL. During the meeting, Somiaya  gave examples of how artificial liquidity, forged warehouse receipts and same stocks pledged with more than one lender. "At present, NSEL is indulging in a cover-up, and the government should order a thorough probe or we will move the courts," he warned.

The minister assured Somaiya that after settling the financial dues which is the top priority now, the government will consider taking further action on the scamsters. Somaiya said speculators created artificial liquidity through NSEL and gave fake, forge stocks, transactions, receipts. “Thousands of crores taken out and used for hoarding and speculation in commodities," he said.

Somaiya told the minister that promoters, officials and brokers in connivance used NSEL money for other hoarding and speculation or other business activities. "No one knows where is the Rs 800 crore settlement fund of the exchange," he told Thomas.