Two days after the crisis-ridden National Spot Exchange (NSEL) defaulted on its first tranche of payouts to investors, representatives of the NSEL met FMC officials on Thursday in an attempt to provide greater clarity on the settlement process. Officials, including NSEL vice-chairman Jignesh Shah, Joseph Massey, Anjani Sinha and PR Ramesh, met FMC chairman Ramesh Abhishek and sought direction on the future course of action on the nine defaulting members that owe Rs 2,895 crore, or nearly 52% of the total outstanding.
“I have been told by the new management that all the default proceedings will be initiated... Right now, the focus is to ensure that all the steps that are required are followed diligently and strictly,” said Jignesh Shah. He added that the board is taking all possible measures to ensure that the settlement is done properly and that proceedings against defaulting members are initiated as soon as possible.
PR Ramesh, who has been appointed as an ‘officer on special duty’ with all the powers of a CEO, said that all the legal obligations of an exchange will be met during the settlement process. “Whatever will be done, will be done according to the bylaws,” he said after his meeting with the FMC chief. Ramesh, however, did not give a clear response when asked about the second pay-in scheduled for Friday.
The exchange has already defaulted on its first pay-out of Rs 174.72 crore as it could collect only Rs 92.73 crore in the escrow account. In the subsequent days, the exchange has just collected Rs 40 lakh of dues with none of the 24 borrowers making any payment on Thursday.
The NSEL management also met the recently formed NSEL investor forum along with leading brokers who are seeking payments of close to R5,500 crore. At the time of going to press, the investor association spokespersons, led by chairman Sharad Kumar Saraf, and leading brokers, including Motilal Oswal, CMD- Motilal Oswal Securities, Anand Rathi, chairman — Anand Rathi Financial Services, and Nirmal Jain, chairman-India Infoline, were in discussion with the exchange officials and board members.
The brokers are seeking an assurance of regular payout a day after the Forward Market Commission ordered the exchange to auction the commodities held by all the members that defaulted on their pay-in obligations.