Responsibility to settle dues is on you, govt tells Jignesh Shah

Government also directs NSEL chief that priority should be given to small investors during the settlement

Government has asked Jignesh Shah, head of Financial Technologies that is the promoter of crisis- ridden National Spot Exchange Ltd (NSEL), to take complete responsibility for ensuring the settlement of about Rs 5,600 crore due to investors.

The government also said priority should be given to small investors during the settlement, which is being overseen by the Forward Markets Commission (FMC).

Financial Technologies India Ltd (FTIL), headed by Shah, has a 99% stake in NSEL. The spot commodities exchange has to settle the dues after it suspended trading in all contracts recently on directions from the government.

"We are watching the situation. FMC has not yet submitted the report. We have to know where the stocks are. Primarily, we are putting the responsibility of settlement on Jignesh Shah," Consumer Affairs Minister K V Thomas told PTI.

"He (Shah) has to be responsible," Thomas said, adding that this was communicated to Shah at a recent meeting.

NSEL has said it will submit the settlement plan by August 14 and has set up a four-member panel to oversee the process.

Expressing concern about the settlement issue, the minister said, "Priority will be given to small investors."

 Reacting to the minister's comment, NSEL said in an e-mailed statement: "Jignesh Shah had met Minister on behalf of NSEL board to apprise him on the formation of the 'Oversight Committee' and the other steps taken by the NSEL board. In this context, Minister has advised Mr Shah to ensure that the due process of settlement is followed as per the regulations and under the supervision of FMC."

Stating that the NSEL board is taking all steps to ensure a smooth settlement process, the exchange said, "FMC is actively coordinating with NSEL to ensure that the entire settlement process is completed in a time-bound manner.

"NSEL board is monitoring the process of settlement and hopeful that the pay-in and pay-out will be completed in an orderly manner," it said.

Earlier, the exchange had disclosed that 21 entities owe nearly Rs 5,600 crore to investors, with the maximum liability of Rs 929 crore from N K Proteins.

Eight of the entities said they will pay their liability on time and 13 have agreed to pay 5% of their total dues every week. In addition, three entities, with total liabilities of Rs 311 crore, are yet to decide on the payment schedule, the exchange had said recently.

The maximum exposure of investors on NSEL is in sugar, paddy and castor seed/oil. PTI LUX MJH