NSEL defaults on third consecutive payout

Written by fe Bureau | Mumbai | Updated: Sep 4 2013, 13:51pm hrs
For the third consecutive week, the crisis-hit National Spot Exchange (NSEL) has defaulted on its payment obligations, thereby putting further pressure on the regulators to act expeditiously against the bourse.

The exchange has managed to pay only R15.37 crore against R174.72 crore as laid down in the settlement schedule. The first pay-out day on August 20 saw the exchange disburse only R92.13 crore, which was followed by R12.60 crore on August 27. In other words, the exchange, till date, has disbursed only R120 crore against R524.16 crore.

NSEL, however, last week made a separate payment to small investors totalling R177.23 crore by taking a bridge loan from Financial Technologies-India (FTIL).

According to the payment schedule proposed earlier by NSEL, dues amounting to R4,200 crore would be settled over a period of 20 weeks with each week seeing payouts of R174.72 crore. This would be followed by R86 crore of settlement for the next 10 weeks.

Meanwhile, the exchange has issued notices under Section 138 of Negotiable Instruments Act to 14 defaulters. Notices against 14 defaulters have been issued under Section 138 of Negotiable Instruments (NI) Act for bouncing of cheques for settlement. The payments from the defaulting members will not be in a predefined schedule and would depend on actual receipts of payments based on (sale of commodities, assets or payments made through own resources), stated a release

by NSEL.