Lotus disputes NSEL declaring it a defaulter

Calls unilateral declaration of default by exchange 'illegal and mala fide' in a legal notice

After its investors going on the warpath against it, one of crisis-ridden National Spot Exchange’s borrowers, Lotus Refineries, has denounced it.

Strongly disputing NSEL’s move proclaiming it a defaulter, Lotus Refineries on Friday demanded this be revoked immediately. In a counter-legal notice served on the exchange, the Mumbai-based palm oil refiner termed the NSEl one “illegal, baseless and mala fide”.

Lotus was one of several entities declared ‘defaulter’ and has dues of Rs 252 crore, according to NSEL. However, Lotus claims it is NSEL which is holding the goods in question and not delivering these. “As per the NSEL trade and settlement data on August 12, there is no margin receivable from Lotus Refineries, while a fixed deposit of Rs 750,000 was provided to NSEL. Further, as per the stock position published by NSEL on its website, NSEL is holding 44,586 mt of RBD palm oil stock belonging to our client,” the company said. Lotus charged that the declaration of NSEL on August 22 proclaiming it a defaulter went against the principle of rule 41 of the exchange, detailing the grounds and procedure for such a declaration. Demanding immediate recall of the declaration, Lotus has said this had caused a serious loss of reputation to it, also impairing its ability to raise loans or funds to operate its other businesses.