The NSEL Investor Forum is close to reaching an agreement with Jignesh Shah-promoted Financial Technologies for a settlement in the Rs 5,600-crore National Spot Exchange scam.
Shah has agreed to pay between Rs 1,100 crore and Rs 1,200 crore with a bulk of the amount paid upfront and the rest spread over a year. In return, he has asked the Forum to withdraw cases filed against him and Financial Technologies.
Besides, Shah wants the Forum not to file a case in the Bombay High Court against Financial Technologies to lift the corporate veil on the NSEL scam. If that demand is accepted by the Court, it makes Financial Technologies also liable for the Rs 5,600 crore NSEL owes investors.
Motilal Oswal, who is part of negotiation team, said the deal involves some accommodation from the investor community and is expected to be finalised by next week.
Once the deal is finalised, it would be filed with the appropriate Court and investors’ approval would be sought as per court direction, he added.
But even if the case against Shah is withdrawn it does not absolve him completely as the police will still investigate the criminality angle involved in the entire episode.
Mohan India deal
The Rs 771-crore settlement reached between Mohan India, a defaulter, and NSEL will be heard by the Court on Monday. The company is ready with a cheque of Rs 59 crore, but could not deposit it without the Court direction, said Arun Dalmia, President of NSEL Investors Forum.
“Once approved by the Court, Mohan India has to deposit Rs 25 crore a month. Failing to do so will not only attract a penalty of Rs 100 crore, but would be treated as contempt of court,” he added.
The Forum will file a petition to seek the Court’s direction to Financial Technologies not to utilise the proceeds of $150 million (about Rs 950 crore) received from Singapore Mercantile Exchange stake sale for any other purpose.
Blaming the brokers for the entire mess, Ketan Shah, an aggrieved investor, asked whether the brokers would make good of the loss incurred by the investors. He also wanted to know why the brokers never collected the warehouse receipts for the money invested on their behalf.
Responding to the query, Sharad Kumar Saraf, Chairman, NSEL Investor Forum, said investors should join hands with the brokers to recover the money and should not deviate from their target – Jignesh Shah and Financial Technologies.