FTIL had said in a press release dated September 16, ''The interest of the 13,000 clients of the brokers who traded on NSEL platform for higher returns cannot be termed as public interest when 66% of the entire outstanding amount is being claimed by just 6% of the Trading Clients (i.e. by just 781 persons).
NSEL Investors Forum has told the market regulator that the amount outstanding of each investor is not relevant. All investors including 94% of small investors as claimed by FTIL have in fact invested a large portion of their wealth simply because NSEL (which was controlled and masterminded by Jignesh Shah and FTIL induced them to invest promising safe fixed return arbitrage (With full knowledge of FTIL). These small investors are virtually now on the street, the forum added. An e-mail sent to FTIL on Thursday for their responses, was not answered till the time of going to press.
The letter written to Securities and Exchange Board of India added that the NSEL issue has affected the commodity trade and economy, which is all public interest. Commodity trade in India has fallen by nearly 60% in last year clearly showing that investors have lost interest in Commodity Exchanges, thereby affecting the commodity trade and economy in general. This is nothing but public interest. The top 6% investors also include PSUs like MMTC and PEC where direct public money and hence public interest is involved. Such investors also have a larger stake in economy which gets hurt if their sentiments are affected. There will also be a direct loss to the exchequer by 30% of Income Tax setoffs claimed (about Rs 1600 Crores) due to the scam which is passed on to the common man for the fraud perpetrated by FTIL.
FTIL had said that if interests of NSEL investors are considered as public interest than interests of more than 60,000 public shareholders of FTIL are equally important public interest, and if it was right to subject the public shareholders of FTIL to a non-existent liability of Rs 5,500 crore through a forced merger when existence of any legal liability is sub-judice. The investors forum said that as per the last annual report of FTIL, out of about 60,000 shareholders, 56,254 shareholders hold 500 or less number of shares. It is only 133 large shareholders who are holding over 86.33% shares (10,000 shares)
.. these shareholders are mostly connected to the main architect of fraud Mr Jignesh Shah and his associates and hence the figure of 60,000 shareholders is nothing but an eye-wash. The forum added that various cases in Mumbai High Court have nothing to do with merger of NSEL with FTIL and the issue is purposely raised to obfuscate everyone and digress form the issue of culpability of FTIL. Further the forum said that FTIL's assertion that it has fully supported NSEL in the recovery process, is incorrect and it has instead spent crores of Rupees to defend the main culprit Mr Jignesh Shah in criminal and civil matters.