Defaulter NK Protein plans to pay a third of debt to NSEL

Written by fe Bureau | Mumbai | Updated: Nov 27 2013, 08:19am hrs
NK Protein, the biggest defaulter in the R5,600 crore National Spot Exchange (NSEL) settlement crisis, on Tuesday said it plans to repay R265 crore to the troubled spot exchange. This is a third of the total outstanding dues of R966.9 crore owed to the exchange as of mid-August.

NK Protein submitted a proposed settlement plan in the MPID (Maharashtra Protection of Interest of Depositors) court, which is hearing the bail plea of Nilesh Patel, the managing director of the company. According to this plan, the company plans to pay R25 crore upfront and R5 crore every month to NSEL over the next four years. The court reserved its judgement on Patels bail application till Wednesday.

Patel, who was taken into the custody on October 22, is one of the five persons arrested by the Economic Offenses Wing (EOW) of the Mumbai Police in connection with the scam. He is also the son-in-law of NSELs former chairman Shankarlal Guru who resigned from his post on August 19.

The police have so far attached close to 100 properties belonging to defaulting companies and exchange executives, including Anjani Sinha, former MD & CEO of the spot exchange. Sinha is one of the three former employees of NSEL which are in police custody, the other two being Amit Mukherkjee and Jay Bahukhandi former assistant vice-presidents of NSEL. Arun Kumar Sharma, the director of Lotus refineries, which owed the exchange R159 crore, has also been detained by the police.

In October, Mohan India, another defaulter that owed R910 crore to NSEL, signed an agreement with the exchange to repay R771 crore. The settlement terms included a down-payment of R11 crore, with the rest of the money to be paid back within the next one year.

Meanwhile, the spot exchange has appointed Choksey & Choksey as the forensic auditor for e-series contracts. In an update on Monday, NSEL said the forensic audit process for these products commenced on November 22 with the auditor likely to submit a report within six weeks.

The appointment is a result of the Bombay High Court order, dated October 28, in which it asked the Forward Market Commission (FMC) to appoint a forensic auditor to examine the e-seires contracts under which investors could buy and sell commodities in a de-materialised form.