Now, Jignesh Shah, Massey 'concerned' about NSEL stocks

Both FT group officials are directors in NSEL; move seen as distancing board from the fiasco

Two directors of the beleaguered National Spot Exchange Ltd (NSEL) have expressed concern on the quantity and quality of the stocks in the exchange’s warehouses before commodities market regulator Forward Markets Commission (FMC).

The statements by Financial Technologies group founder Jignesh Shah and MCX Stock Exchange Managing Director Joseph Massey came during a meeting with the regulator last Tuesday, even as NSEL’s chief executive Anjani Sinha assured investors and other stakeholders there was enough stock to cover the liabilities.

Shah and Massey’s statements were disclosed in FMC’s observations on the settlement plan submitted by the exchange on August 16. “During the meeting with the commission on August 13, 2013, NSEL directors Jignesh Shah and Joseph Massey inter alia raised concern on the quality and quantity of commodities lying at the various accredited warehouses of NSEL.”

The duo also told the commission they had appointed a collateral management firm, SGS, to carry out a detailed assessment of the stocks of commodities at all accredited NSEL warehouses.

“That is a way of saying this has come to their notice only now,” said a former Securities and Exchange Board of India official and a senior regulatory expert. “They are distancing themselves from any potential liability on this count by saying they are also concerned about the quality and quantity of the stock.”

The expert also referred to Anjani Sinha’s recent statement that he, along with his management team, was solely responsible for the functioning of the exchange.

“I and my management team at National Spot Exchange Limited have been solely and directly responsible for all operations, including screening of parties, warehouse management, risk management and other related company matters,” he had said in a statement issued along with the new settlement plan.

Recently, the NSEL Investors’ Forum, which represents the 13,000-odd investors affected by the crisis, had told Business Standard the buck stopped with the exchange’s promoter and that he was personally responsible for all operations.