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Business News/ Market / Stock-market-news/  NSEL makes public list of 10 defaulters, clients
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NSEL makes public list of 10 defaulters, clients

Investors stage protest against NSEL even as exchange’s promoter says all commitments will be honoured

Promoter Jignesh Shah says NSEL is extending “full cooperation” to the forensic auditor. Photo: Abhijit Bhatlekar/Mint (Abhijit Bhatlekar/Mint)Premium
Promoter Jignesh Shah says NSEL is extending “full cooperation” to the forensic auditor. Photo: Abhijit Bhatlekar/Mint
(Abhijit Bhatlekar/Mint)

Mumbai: Around 500 investors, a part of the National Spot Exchange Ltd Investors Forum (NIF), staged a protest on Wednesday in front of the National Spot Exchange (NSEL) office in Mumbai as the exchange made public the names of 10 members who failed to make payments to it in line with the settlement schedule.

The protesters raised slogans against NSEL promoter Jignesh Shah, holding him responsible for the mess and demanding payment of their dues.

NIF is a representative body of investors in the exchange.

NSEL defaulted on its payment to investors on Tuesday for the second consecutive week by paying just 12.6 crore instead of the assured 174.72 crore weekly amount to investors.

NSEL said that it had taken a loan of over 177 crore from its promoter, Financial Technologies India Ltd (FTIL), to pay investors owed up to 10 lakh.

The investors also criticized NSEL’s move of paying small investors first as they felt it was being made without approval of the Forward Markets Commission (FMC).

“We will honour all our commitments. There have been lapses at NSEL but we will fix those," Jignesh Shah said in an interview to CNBC-TV18 business news channel.

He added that NSEL was extending “full cooperation" to the forensic auditor.

On Tuesday, NSEL said it appointed consulting firm KPMG as its forensic auditor.

Meanwhile, FTIL said in a BSE filing on Wednesday that two directors—C. M. Maniar and N. Balasubramanian—had resigned from the board. Balasubramanian was appointed director on 22 August, following the resignation of two directors, R. Devarajan and P.R. Barpande.

The FTIL board now consists of chairman and group CEO Shah, wholetime directors Dewang Neralla and Manjay Shah and directors Chandrakant Kamdar and Ravi K. Sheth.

The names of the defaulters, an NSEL release said, are: LOIL Continental Food Ltd, LOIL Health Foods Ltd, Mohan India Pvt. Ltd, Namdhari Food International Pvt. Ltd, Namdhari Rice and General Mills, White Water Foods Pvt. Ltd, Shree Radhey Trading Co., P.D. Agroprocessors Pvt. Ltd, Swastik Overseas Corporation, and Juggernaut Projects Ltd.

The exchange earlier declared a few other members as defaulters for the same reason. Those members were ARK Imports Pvt. Ltd, Loil Overseas Foods Ltd, Lotus Refineries Pvt. Ltd, N.K. Proteins Ltd, NCS Sugars Ltd, Spin Cot Textiles Pvt. Ltd, Tavishi Enterprises Pvt. Ltd, Vimla Devi Agro Tech Ltd and Yathuri Associates.

Of these, Lotus Refineries had on 20 August disputed claims made by the exchange on the money it owes.

A Lotus Refineries release said it had maintained sufficient funds, commodities securities and bank guarantees with the exchange. It added that stocks worth 247.50 crore are “presently being held by the exchange".

NSEL had on 6 August claimed that Lotus Refineries held stock worth 247.50 crore and it owed 252.56 crore to the exchange.

NSEL has also published the details of the 42 clients who have traded through the defaulting members.

Shares of Financial Technologies India Ltd gained 6.8% to close at 141.45 on Wednesday while the BSE’s benchmark index, Sensex, gained 0.16% to close at 17,996.15 points.

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Published: 28 Aug 2013, 11:52 PM IST
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