The beleaguered National Spot Exchange, which defaulted trade settlement for the fourth time, claimed it has taken several corrective measures to solve the problems faced by it.
NSEL is actively pursuing recovery of outstanding dues from the members with pay-in obligation. This includes initiation of civil and criminal proceedings against the defaulting members. So far, 19 members have been declared defaulters and legal proceedings have commenced under the Rules and Bye-laws, the exchange said in a press release issued on Tuesday.
While 13 defaulters out of the 19 have met the exchange officials during the last two weeks, it said six are yet to fall in line. Legal notices against 14 defaulters have been issued for bouncing of cheques meant for settlement. So far, five defaulters have agreed to provide their properties as collateral for disposing of the same, said the exchange. The outstanding liability of these five defaulters stands at Rs 1,328 crore and the collateral offered is Rs 1,458 crore. However, it is subject to due diligence and valuation, it said.
The exchange has auctioned commodities worth Rs 7.77 crore pledged with it and payout was made with these proceeds on September 10. Auction of other stocks are in process, it said.
Confirming the defaulters’ participation on the exchange platform, audit firm Sharp & Tannan said that payouts have been made by NSEL to the bank accounts of the defaulting members. The liability was confirmed by the chartered accountancy firm at Rs 5,574.25 crore as on August 12. Sharp and Tannan has also conducted physical audit of gold, silver, platinum and base metals in respect of e-series contracts and found the physical to be in order with the outstanding e-series units.
In nine warehouses relating to seven defaulters, significant stock shortage has been found.
The audit team was not allowed to inspect 29 warehouses relating to 11 defaulters. SGS, the audit firm, is yet to submit report for two more warehouses relating to two parties, said the exchange.