Mumbai: The Indian Council of Investors—a Thane, Maharashtra-based investor association—filed a public interest litigation (PIL) against National Spot Exchange Ltd (NSEL) in the Bombay high court on Friday.
The PIL, which seeks a government takeover of the exchange promoted by Jignesh Shah-run Financial Technologies (India) Ltd or FTIL, comes even as the spot exchange released its payout calendar to settle dues worth Rs.5,600 crore to its 15,000-odd investors.
The PIL seeks intervention of Forward Markets Commission (FMC) or other relevant authorities to take immediate custody of commodities stated to be with NSEL at its warehouses.
The investor group urged the authorities to treat the commodities in NSEL’s warehouses as collateral against borrowings and wanted the ministry of consumer affairs, ministry of finance, FMC or the Securities and Exchange Board of India (Sebi) to disclose the market value of those commodities.
The investor group has demanded the FMC or any relevant authority to take charge of the day-to-day administration of NSEL and to immediately take possession of assets of NSEL’s top 25 borrowers.
Further, it wanted FMC to pass orders to stop borrowers from selling, liquidating or alienating their assets.
Besides, the investor group has in the PIL demanded Sebi to examine whether there was violation of norms by any brokers, asset management companies or portfolio management services firms.
On Wednesday, NSEL put out its settlement calendar to clear dues to its investors. According to the schedule, the dues will be settled in a phased manner, with the first pay-in to be conducted on 16 August and the first payout on 20 August. According to the plan, over the next 20 weeks, an amount of Rs.174.72 crore will be settled by the exchange’s 24 processors every week. Thereafter, Rs.86.02 crore of dues will be settled every week till the 30th week and the remaining Rs.1,219.71 crore will be settled in the 31st week. During the settlement period, some members will pay their dues by selling their commodities or physical assets.
According to the plan, NSEL will be able to settle Rs.5,574.31 crore over the next 31 weeks. The exchange had on 31 July, suspended trading in all contracts except the e-series ones without assigning a clear reason. Later, it suspended trading in its e-series products too, bringing the spot exchange to a complete halt. E-series contracts are those in which retail investors can buy and sell commodities in demat form. On Wednesday, NSEL said trading in e-series contracts will stay suspended until further directions from the government and FMC.
FTIL shares dropped 18.14% on Friday morning to Rs.120. Later, they gained 21.42% and touched an intraday high of Rs.178; They ended 3% up at Rs.151 on the BSE on Friday.