Crisis-hit NSEL gathers Rs190 cr to pay off small investors
28 Aug 2013
1
The crisis-hit National Spot Exchange Ltd (NSEL) has managed to collect Rs190 crore just ahead of the deadline set by the commodities market regulator Forward Exchange Commission for the second payment schedule, thanks to a Rs177.23 crore bridge loan from its parent, Financial Technologies.
The NSEL will use the Financial Technologies loan and the Rs12.60 crore accrued in an escrow account to settle dues of small investors immediately. The exchange has agreed to pay Rs5,600 crore to its investors in 30 weeks.
Commenting for the first time on the NSEL crisis, finance minister P Chidambaram said on Tuesday that action against the exchange will be taken based on the recommendations of the task force, which has been set up under economic affairs secretary Arvind Mayaram.
The task force will be assisted by two working groups - one headed by the Enforcement Directorate to look into legal violations, and the other led by a deputy governor of the Reserve Bank of India (RBI) to examine the systematic issues.
The two groups will have representatives from multiple agencies - the Securities & Exchange Board of India (SEBI), the RBI, the ministry of corporate affairs, the Forward Markets Commission, the Central Board of Direct Taxes (CBDT), the Serious Fraud Investigation Office, the Directorate of Revenue Intelligence (DRI), and the advisor to the Financial Stability Development Council (FSDC) as members.
The groups will submit their reports by 7 September. ''Once the two reports come, whatever is under my jurisdiction, I will take action,'' Chidambaram said.
He also said that since developments are unfolding rapidly, ''We are keeping a careful watch. We are in touch with SEBI. We are dealing with the situation. And action that is required will be taken.''
From the Rs190 crore that NSEL has garnered, 608 investors who need to get up to Rs2 lakh each will receive all their dues. Another 6,380 investors who have to get between Rs2 lakh and Rs10 lakh will get 50 per cent of their dues. The remaining will be paid proportionately, according to the settlement plan.
Meanwhile, Grant Thornton, appointed forensic auditors on Tuesday, has started its investigative work. This is in addition to the internal investigation already initiated against the management team, said NSEL, which stopped trading on its platform abruptly on 1 August.
The NSEL will use the Financial Technologies loan and the Rs12.60 crore accrued in an escrow account to settle dues of small investors immediately. The exchange has agreed to pay Rs5,600 crore to its investors in 30 weeks.
Commenting for the first time on the NSEL crisis, finance minister P Chidambaram said on Tuesday that action against the exchange will be taken based on the recommendations of the task force, which has been set up under economic affairs secretary Arvind Mayaram.
The task force will be assisted by two working groups - one headed by the Enforcement Directorate to look into legal violations, and the other led by a deputy governor of the Reserve Bank of India (RBI) to examine the systematic issues.
The two groups will have representatives from multiple agencies - the Securities & Exchange Board of India (SEBI), the RBI, the ministry of corporate affairs, the Forward Markets Commission, the Central Board of Direct Taxes (CBDT), the Serious Fraud Investigation Office, the Directorate of Revenue Intelligence (DRI), and the advisor to the Financial Stability Development Council (FSDC) as members.
The groups will submit their reports by 7 September. ''Once the two reports come, whatever is under my jurisdiction, I will take action,'' Chidambaram said.
He also said that since developments are unfolding rapidly, ''We are keeping a careful watch. We are in touch with SEBI. We are dealing with the situation. And action that is required will be taken.''
From the Rs190 crore that NSEL has garnered, 608 investors who need to get up to Rs2 lakh each will receive all their dues. Another 6,380 investors who have to get between Rs2 lakh and Rs10 lakh will get 50 per cent of their dues. The remaining will be paid proportionately, according to the settlement plan.
Meanwhile, Grant Thornton, appointed forensic auditors on Tuesday, has started its investigative work. This is in addition to the internal investigation already initiated against the management team, said NSEL, which stopped trading on its platform abruptly on 1 August.
.webp)
