NSEL crisis: Govt does not rule out default in first payment

The excahnge uploads list of buyers, sellers on its website

The government today said there might have been default in the first payment of dues by the crisis-ridden National Spot Exchange (NSEL) on August 16 and wanted the exchange to take action against defaulters according to its own bye-laws.

Meanwhile, the exchange came out with a list of buyers and sellers on its website today.

The list disclosed that the exchange, promoted by Jignesh Shah-headed Financial Technologies India Ltd (FTIL), has to recover Rs 5,574.35 crore from 24 parties and pay Rs 5,380.53 to 148 members.

A group of investors of NSEL today met consumer affairs secretary Pankaj Agarwal. Last week, the NSEL had announced its seven-month plan to settle dues to investors. As per the plan, August 16 was the first 'pay-in' day and August 20 the first 'pay-out' day.

"Friday (August 16) was the first day of payment and there might have been defaulters. We have asked NSEL to declare the list of defaulters and take action against them as per its own bye-laws," Agarwal told reporters here.

He said NSEL being a guarantor has been told to behave like a guarantor and get its stocks audited by a government appointed auditor.

Later the investors also met consumer affairs minister K V Thomas and told him that his department has the responsibility to solve the crisis as FMC functions within its purview.  The investors also met finance ministry officials.

The list was uploaded by the exchange following an order from the regulator--Forward Markets Commission (FMC). According to the list, top five buyers account for nearly 60% of total outstanding of Rs 5,574.35 crore.  Top 10 buyers account for nearly 85% of total.

However, the exchange has to pay Rs 5,380.53 to 148 members, including Indian bullion market association (IBMA) which is a clearing agency for several investors.

Amount payable to IBMA is Rs 1,159 crore. Over 100 investors have to get money from IBMA. Those whose money is stuck include PSUs like MMTC and PEC as well, according to data given on the website.

The member with largest unsettled position of Rs 967 crore is N K Protins which will sell its assets and pay dues as claimed by the exchange today on its website.

Mumbai-based edible oil producer and retailer Lotus Refineries has countered the claims made by NSEL for pending receivable dues of Rs 252.56 crore. The exchange has categorised Lotus Refineries as the only “non-compliant” member in a circular uploaded on its website on Monday.

Protesting the claim, Lotus has submitted a letter to FMC, the agency monitoring the payouts to investors, saying NSEL was liable to pay a sum of Rs 108 crore to the edible oil company.

Earlier in the day, the NSEL default crisis echoed in Parliament for the first time ever since the crisis broke out. Raising the issue during the zero hour, BJP leader Prakash Javedkar said that the crisis is similar to the Harshad Mehta and Ketan Parekh scams and the government should explain its role.

He alleged NSEL has close links with a Cabinet minister and wanted that the matter should be looked into.