NSEL board blames former management for payment crisis

Sep 03 2013, 12:15 IST
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NSEL, which is scheduled to make another round of payments to investors on Tuesday, may default once again. Reuters NSEL, which is scheduled to make another round of payments to investors on Tuesday, may default once again. Reuters
SummaryThe board of the NSEL has all but washed its hands of the Rs 5,600-crore payments crisis.

already sacked its MD & CEO Anjani Sinha and six other officials, including the chief financial officer and heads of business development and market operations.

According to sources, FMC has recommended to the government that a “multi-agency team should take charge of the investigations,” since that there are enough indications of “criminal fraud, money laundering, embezzlement and siphoning of funds.”

Incidentally, the initial report by Swiss firm SGS – appointed to audit the stocks lying in various warehouses – is also believed to have confirmed the suspicions related to warehouse fraud and missing stocks. Only around 15% of the stocks that were initially claimed were actually found during the audit. Of the 23 odd warehouses examined, stocks worth only Rs 300 crore was found, against the Rs 2,000-crore stock that was indicated to be lying at the warehouses concerned. The audit firm was also denied entry to some of the warehouses, hinting at complicity between borrowers and the exchange, said sources.

NSEL, which is scheduled to make another round of payments to investors on Tuesday, may default once again. Till August 31, NSEL had received Rs 110.75 crore in the escrow account from the borrowers. The exchange is supposed to make payments to the tune of Rs 174.72 crore every Tuesday for 20 weeks. The exchange paid out just Rs 92 crore in the first round and Rs 12.60 crore in the second round.

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