NSEL scam: EOW attaches properties of NK Proteins

NKPL is biggest defaulters in NSEL case and owes over Rs 969 crore to spot exchange

The economic offenses wing (EOW) of the Mumbai police,  investigating the Rs 5,600-crore payment crisis at National Spot Exchange Ltd (NSEL), has attached several properties of city-based NK Proteins Ltd (NKPL) and its promoter and managing director, Nilesh Patel.

NKPL, which owes Rs 969 crore to the spot exchange, is the biggest defaulter in the NSEL case. The company markets various edible oils under the Tirupati brand.

EOW officials have attached NKPL offices and factories in Gujarat and Maharashtra, besides land and Patel's residence in Ahmedabad. Currently, Patel is in judicial custody. He was arrested in October. He has applied for bail in a local Mumbai court.

“Patel's lawyer Nandish Chudgar,   said he didn't have details of the list of properties attached and wasn’t aware whether  EOW had frozen the bank accounts of NKPL and Patel. Patel is the son-in-law of Shankarlal Guru, former chairman of NSEL and a former member of the legislative assembly from Unjha. Guru resigned as chairman of NSEL after the settlement crisis broke out in July-end.

Earlier, EOW had also arrested Anjani Sinha, former chief executive and managing director of NSEL; Jay Bahukhandi and Amit Mukherjee, former assistant vice-presidents of NSEL; and Arun Kumar Sharma, director of Lotus Refineries, which owed about Rs 159 crore to the exchange.

Meanwhile, Icra has further downgraded its long-term rating on NKPL, owing to the company's involvement in the NSEL crisis. After downgrading the rating from BB+ to B- in August, the rating agency had scaled down the rating to C, while maintaining the short-term rating at A4. Further, Icra has suspended the ratings assigned to all bank facilities of NKPL.

“The ratings revision takes into account the expected weakening in the credit risk profile of the company, following the cancellation of the bank limits by bankers,” said an Icra report. The agency “also takes into account the potential impact on the credit profile of NKPL on account of its large outstanding exposure amounting to (approximately) Rs 970 crore to NSEL for commodity trading transactions,” the report added.

The suspension of ratings was also prompted by Icra's inability to carry out a rating surveillance, in the absence of requisite information from the company. Icra might “suspend any rating outstanding if, in its opinion, there is insufficient information to assess such rating during the surveillance exercise,” the report said.