NSEL defaults in 2nd payout; takes loan to pay small investors

Written by Press Trust of India | New Delhi | Updated: Aug 28 2013, 03:49am hrs
As it defaulted for the second consecutive week in paying its investors, crisis-ridden National Spot Exchange (NSEL) today said it has received over Rs 177 crore from its main promoter, Jignesh Shah-run FTIL, which will be used to clear payments due to small investors.

NSEL today defaulted for the second consecutive time in meeting its weekly payment obligation of Rs 174 crore. Payout today was about Rs 12.05 crore (rpt) Rs 12.05 crore as against Rs 174 crore due. As per the schedule drawn, the exchange was to pay investors every week for 20 weeks beginning August 20.

Forward Marketing Commission (FMC) Chairman Ramesh Abhishek did not say what action it will take against NSEL but said the FTIL funding to NSEL was outside the the payment schedule. Together with Rs 12.60 crore, borrowers had deposited in the escrow account, NSEL has Rs 190 crore for payments to 7,000 investors.

NSEL in a statement said it will pay 100 per cent amount to 608 investors who were to receive amounts up to Rs 2 lakh as on July 31 this year. These investors will receive the remaining amount proportionately as per the settlement plan, it added.

The announcement has came on the second day of the pay- out when exchange is supposed to pay Rs 174.72 crore (rpt) Rs 174.72 crore. The beleaguered bourse has availed a bridge loan from its promoter Financial Technologies (India) Ltd (FTIL) for this disbursement.

"NSEL has availed a bridge loan from FTIl, the promoter company to make these payments aggregating Rs 177.23 crore," the statement added.

Meanwhile, the NSEL will also make a pay-out of Rs 12.05 crore (rpt) Rs 12.05 crore under the settlement plan.

The exchange added that it has appointed Grant Thornton appointed as the forensic auditors who have commenced the audit today.

"NSEL is actively pursuing recovery of the dues from the members with outstanding dues. This includes initiation of civil and criminal proceedings against the defaulting members besides taking actions under the Rules and Bye-laws of the

NSEL," the statement added.