The National Spot Exchange Investors’ Forum today met Economic Affairs Secretary Arvind Mayaram and demanded stern action, including seizure of assets, against defaulters and the exchange’s promoter, Jignesh Shah.
The Forum’s members, comprising leading players, such as Anand Rathi and Motilal Oswal, alleged that Shah had asked the investors to take a Rs 1,100-crore haircut. The Forum rejected the proposal.
Earlier, the NSEL declared nine entities as defaulters for failing to clear their dues by August 20. The entities are ARK Imports, Loil Overseas Foods, Lotus Refineries, N.K. Proteins, NCS Sugars, Spin Cot Textiles, Tavishi Enterprises, Vimladevi Agrotech and Yathuri Associates.
The NSEL is facing problems settling dues worth Rs 5,600 crore after it suspended trade on July 31 following a Government directive. The Consumer Affairs Ministry wanted the exchange to suspend trade for violation of various norms, including allowing traders to go short in a spot exchange. Though the exchange has come out with a settlement plan twice, payout is yet to happen to those owed money, including government agencies such as MMTC and PEC.
Talking to reporters later, Mayaram said that as the Finance Ministry did not have jurisdiction over the matter, the Forum’s representation will be forwarded to the ministries concerned.
Interacting with the media, the Forum President, S. K. Saraf, said that members will wait for action from the Government before taking legal recourse. But one Investor Association has already moved the Bombay High Court filing a Public Interest Litigation. According to Saraf, the members have asked for a settlement as soon as possible. The Forum said its members had bought commodities and the NSEL was the custodian of the stocks. Investors had incurred transaction charges of up to 0.5 per cent for warehousing, transportation, insurance and expect to be paid back in full.
The investors wanted to know why the borrowers and commodity stock auditors had not been questioned till date. They also raised questions on why the money trail was not made public.
Searches continue
The Income-Tax Department continued to search the offices and premises of defaulters. The Enforcement Directorate and the Directorate of Revenue Intelligence are also looking into the matter. The Prime Minister’s Office has already asked the Finance Ministry to form a task force to see if any violation had taken place.
shishir.sinha@thehindu.co.in