While regulators, investigation agencies are apparently working hard at tracking Rs5,600 crore that seems to have vanished from NSEL without a trace, the 'investors' who are fighting for their funds held a unique protest outside the exchange plaza -- almost every one of these protestors are HNI and many turned up in BMWs, Mercedes and Pajero cars
NSEL Investors Forum (NIF), a representative body of investors in National Spot Exchange Ltd (NSEL), stepped up the ante by holding public protests outside the office of Financial 
Technologies Ltd (promoter of NSEL) on Wednesday. But unlike any other protest of this nature, where investors claim to have lost their hard-earned lifesavings, this one was led by bulge-bracket investors.
First, their plan to protest as well as report on their little demonstration was disseminated by a professional PR agency. This firm is also at work trying to set up meetings for the investors with various media houses. The leaders of the forum and other investors turned up in BMWs, Mercedes' and other luxury vehicles. Sharad Saraf, conveyor of NIF arrived in a Pajero (see photo).
While these super-rich investors do deserve full sympathy and their money back, their actions do raise several questions. None of them seems to blame the brokerage firms, which persuaded them to invest in NSEL's ready-forward products which had promised them a 
15% return. In fact, the brokerage firms themselves seem to be part of the forum. This is curious, because the top 10 investors of NSEL happen to be among the biggest brokers on the capital market; and the Securities and Exchange Board of India (SEBI) holds brokers accountable for the advice given to investors.
In a release, the NIF said, "NSEL Investors welcome the government's move to appoint a specific and focused high powered committee under chairmanship of Arvind Mayaram, secretary of Economic Affairs in the Ministry of Finance. The investors are confident that with Government intervention, the money trail will be found and investors' money and confidence will be returned."
NIF said it was also surprised by statements of Shankarlal Guru, who resigned as chairman of NSEL. Guru has also claimed lack of knowledge regarding his son-in-law walking away with Rs950 crore. "It clearly shows his (Guru's) complicity in the fraud and by resigning from chairmanship his involvement cannot be washed away. Guru should at least give some credit to the intelligence of investors and general public. A chairman cannot be an innocent bystander when a fraud of Rs5,500 crore is being committed and almost 20% has gone to his son-in-law. Investors are confident that the law will catch up with him sooner or later," the Forum added.
According to a report in Business Standard, the Economic Offences Wing (EOW) of the Mumbai police will soon launch a probe in the NSEL payment crisis. ''We have received complaints from the spot exchange and also from the investors and a couple of individuals. Right now we are ascertaining the facts and will initiate a full-fledged investigation, as prima facie it looks to be a scam. All aspects will be looked into during the proposed probe,'' the newspaper said quoting a senior officer from the EOW.
Meanwhile, NSEL on Wednesday declared following members as defaulters under the Rules:
NSEL also published the details of the clients who traded through the defaulting members:
CM Code | Member (CM) Name | Member / Client Name | Client Address |
12510 | N K PROTEINS LTD | DARSHAN BALDEVBHAI PATEL | N K CORPORATION 3RD FLOOR POPULAR HOUSE ASHRAM ROAD AHMEDABAD - 380009 GUJARAT INDIA |
12510 | N K PROTEINS LTD | TIRUPATI RETAIL (INDIA) PRIVATE LIMITED | TIRUPATI RETAIL (INDIA) PRIVATE LIMITED 2ND FLOOR POPULAR HOUSE OPP SALES INDIA ASHRAM ROAD AHMEDABAD - 380009 GUJARAT INDIA |
13780 | SHREE RADHEY TRADING CO | HARSHA TRADERS | PUL SABJI MANDI BOMANJI ROAD, SAHARNPUR |
13780 | SHREE RADHEY TRADING CO | R.S. NAGPAL TRADERS PVT LTD | 4/624 ZAFAR NAWAZ SAHARANPUR UP PIN-247001 |
13790 | P D AGROPROCESSORS PVT LTD | DULISONS CEREALS | NEAR CWC VILLEGEA BAJIDA JATTAN ROAD KARNAL - 132001 HARYANA INDIA |
13790 | P D AGROPROCESSORS PVT LTD | DULISONS FOODS | NEAR CWC, VILLEGE BAZIDA JATTAN ROAD, KARNAL -132001 |
13790 | P D AGROPROCESSORS PVT LTD | Dunar Food Limited | Dunar food ltd, near cwc,jattan road bazida karnal-132001 |
13910 | SWASTIK OVERSEAS CORPORATION | SWASTIK OVERSEAS CORPORATION | 11SWASTIK CHAMBERS NAVJIVAN PRESS ROAD INCOME TAX AHMEDABAD - 380014 GUJARAT INDIA |
13960 | AASTHA MINMET INDIA PVT LTD | AASTHA MINMET INDIA PVT LTD | Flat No.: 402, Motati Meadows, C.V. Raman Nagar, Old Madras Road, |
13960 | AASTHA MINMET INDIA PVT LTD | RAGAM MINES P LTD | 2/3/3/8 1ST FLOOR PRASHANT NAGAR SHIVAM ROAD HYDERABAD - 500044 ANDHRA PRADESH INDIA |
13960 | AASTHA MINMET INDIA PVT LTD | VBG INFRASTRUCTURE P LTD | 6-2-30/A FLAT NO 202 EMPRESS COURT LAKDIKAPUL HYDERABAD - 500004 ANDHRA PRADESH INDIA |
13990 | NAMDHARI FOOD INTERNATIONAL PVT LTD | NAMDHARI FOOD INTERNATIONAL PVT LTD | Sri Jiwan Nagar, Dist.: Sirsa, PIN - 125075 |
14050 | WHITE WATER FOODS PVT LTD | BHARAT FOOD AND AGRO PRODUCTS | AFZULAPUR ROAD TEHSIL PAYAL DISTT LUDHIANA LUDHIANA - 141413 PUNJAB INDIA |
14050 | WHITE WATER FOODS PVT LTD | TRADEBIZ COMMODITIES | SHOP NO. 3, VISHWAKARMA ROAD, DORAHA, DISTT. LUDHIANA, PUNJAB, 141421 |
14050 | WHITE WATER FOODS PVT LTD | VIR FOODS LIMITED | BARMALIPUR ROAD PAYAL DISTT LUDHIANA PUNJAB LUDHIANA - 141416 PUNJAB INDIA |
14070 | ARK IMPORTS PVT LTD | GENEX INDUSTRIES LIMITED | VILLAGE SEERAH RAHON ROAD LUDHIANA - 141001 PUNJAB INDIA |
14070 | ARK IMPORTS PVT LTD | GURDEV WOOLS & FIBERS | 6515/ 13 A HAIBOWAL JASSIAN ROAD LUDHIANA - 141001 PUNJAB INDIA |
14070 | ARK IMPORTS PVT LTD | KARAN SALES CORPORATION | 6515 / 14 A JASSIAN ROAD LUDHIANA - 141001 PUNJAB INDIA |
14070 | ARK IMPORTS PVT LTD | PUNJAB WOOL TRADERS | 6515 / 14 JASSIAN ROAD HAIBOWAL LUDHIANA - 141001 PUNJAB INDIA |
14070 | ARK IMPORTS PVT LTD | SHAKUN POLYPLASTS PRIVATE LIMITED | VILLAGE MEHARBAN RAHON ROAD LUDHIANA - 141001 PUNJAB INDIA |
14160 | VIMLADEVI AGROTECH LIMITED | VARLAXMI AGROTECH PRIVATE LIMITED | 45 BASANT VIHAR SPECIAL- KOTA - 324009 RAJASTHAN INDIA |
14170 | NAMDHARI RICE & GENERAL MILLS | NAMDHARI RICE & GENERAL MILLS | Sri Jiwan Nagar, Dist.: Sirsa, PIN - 125075 |
14180 | LOTUS REFINERIES PVT LTD | LOTUS REFINERIES PVT LTD | 402, 4th Floor, Town Center II, Andheri Kurla Road, Opp. Mittal Estate Bus Stop, Mumbai |
14230 | NCS SUGARS LIMITED | NCS SUGARS LIMITED | 405 & 406, Minar Apartments, Deccan Towers, Basheerbagh, Hyderabad |
14230 | NCS SUGARS LIMITED | Sai Samhita Storage Pvt LTD | 4-1, New Port Area, Opp : MMTC Godown, Kakinada, East Godavari 533007 |
14260 | MSR FOOD PROCESSING | BALAJI STAKE RICE INDUSTRIES | SY.NO 322/C VILLAGE&MANDAL HASANPARTHY DIST: WARANGAL-506371 |
14270 | SANKHYA INVESTMENTS | ONENESS AGRI TRADING PRIVATE LIMITED | 5/87 SUNDARAIAH NAGAR, WYRA, KHAMMAM, ANDHRA PRADESH, 507165 |
14310 | YATHURI ASSOCIATES | EKAM ENTERPRISES | SCO 34, 2ND FLOOR, CABIN NO.7, SWASTIK VIHAR, M.D.C. PANCHKULA |
14350 | LOIL OVERSEAS FOODS LTD | LOIL CONTINENTAL FOODS LIMITED | SCO 18-19 SECTOR 9-D MADHYA MARG CHANDIGARH - 160017 CHANDIGARH INDIA |
14460 | LOIL CONTINENTAL FOOD LTD | LOIL CONTINENTAL FOOD LTD | SCO-18-19, 1st Floor, Sector-9D, Madhya Marg, Chandigarh |
14470 | LOIL HEALTH FOODS LTD | LOIL CONTINENTAL FOODS LIMITED | SCO 18-19 SECTOR 9-D MADHYA MARG CHANDIGARH - 160017 CHANDIGARH INDIA |
14510 | MOHAN INDIA PVT LTD | Mangala Shree Properties Pvt Ltd | D 1669, DSIDC, NARELA INDS PARK, NARELA DELHI- 110040 |
14630 | SPIN COT TEXTILES PVT LTD | BSPN EXPORTS PRIVATE LIMITED | 225 SWASTIK PLAZA POKHRAM ROAD ROAD NO 2 THANE WEST MUMBAI MUMBAI - 400601 MAHARASHTRA INDIA |
14660 | TOPWORTH STEELS & POWER PVT. LTD. | OMICRON STEEL TARDERS PVT LTD | 307 3RD FLOOR MAKER CHAMBER V NARIMAN POINT MUMBAI - 400021 MAHARASHTRA INDIA |
14680 | METKORE ALLOYS & INDUSTRIES LTD | METKORE ALLOYS & INDUSTRIES LTD | Plot No.18, Sagar Society, Street No.1, Road No.2, Banjara Hills, Hyderabad |
14680 | METKORE ALLOYS & INDUSTRIES LTD | SRI VASAVI INDUSTRIES LTD | PLOT NO.18 SAGAR SOCIETY ROAD NO 2 BANJARA HILLS HYDERABAD HYDERABAD - 500034 ANDHRA PRADESH INDIA |
14740 | TAVISHI ENTERPRISES PVT. LTD. | TAVISHI ENTERPRISES PVT. LTD. | 1A/101, Rangrasyan Apartment, Sector-13, Rohini, New Delhi |
14770 | JUGGERNAUT PROJECTS LTD | AASTHA ALLOYCORP PVT LTD | SY NO. 193/A ASWATHPURAM (VILL) LAKSHMIPURAM POST KULLU MANDAL KURNOOL - 518218 ANDHRA PRADESH INDIA |
14770 | JUGGERNAUT PROJECTS LTD | AASTHA MINMET INDIA LIMITED | 77/189E KALLUR MANDAL KURNOOL KURNOOL - 518218 ANDHRA PRADESH INDIA |
14770 | JUGGERNAUT PROJECTS LTD | RAGAM MINES P LTD | 2/3/3/8 1ST FLOOR PRASHANT NAGAR SHIVAM ROAD HYDERABAD - 500044 ANDHRA PRADESH INDIA |
14770 | JUGGERNAUT PROJECTS LTD | SOUTHERN ISPAT AND ENERGY LTD | MIG 6 111 RD FLOOR DHARMAREDDY COLONY PHASE 1 KUKATPALLY HYDERABAD RANGAREDDY ANDHRA PRADESH - 500072 HYDERABAD - 500072 ANDHRA PRADESH INDIA |
14770 | JUGGERNAUT PROJECTS LTD | VBG INFRASTRUCTURE P LTD | 6-2-30/A FLAT NO 202 EMPRESS COURT LAKDIKAPUL HYDERABAD - 500004 ANDHRA PRADESH INDIA |
Note: Client name and address based on the information provided by Members through UCC uploads / Invoices
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NSEL : Are the investors victims of a guessing game or lack of free-flow of correct information? If money is not recovered, then there is a business loss to all investors. Whether this loss is allowable for tax purposes is not known to me. What is known to me and the investors is that the Government will lose tax collections based on the losses of the 13000 investors. I hope the Government will ensure that the investors (be they poor or rich) get their money back very very soon. So far, NSEL with all his might, has been able to recover a small sum out of total Rs 5500 crore due which is really a shame considering it's track record. NSEL has failed in its obligations towards the investors. The Government is perhaps on a wait-and-watch policy. The longer the delay, the longer it will take to investors to get back their hard-earned money. At the end of the day, we must accept the fact that this was an exchange recognised by the Government. We must also accept the fact that NSEL was managed by a group that operates several exchanges in different parts of the world. The word 'exchange' connotes trust. A Government which trusts nobody is apt to be the kind of Government nobody trusts. At the same time, I do realize that learning to trust and having faith in others is one of life’s most difficult tasks. But without trust nothing works. Along with the investors, the Government would also be a big loser in the trust game concerning NSEL. With the elections next year, the Government must ensure that the 13000 investors get back their full dues from NSEL fast and furiously. Otherwise it will have have an exponential effect on votes to the current investors – say 13000 investors x 4 (assuming a family of 4) x 4 (assuming each family members talks to others about the Government’s inaction on NSEL issue) … so that is 13000 x 4 = 52000 x 4 = 208000 people or say, 208000 votes.
The Government may ask the investors – “Why did you invest in NSEL” or “Why don’t you take legal action”. I feel these are rhetoric questions. The 13000 investors are looking to the Government to get back their dues. The 13000 investors are not interested in any blame game. They are pleading to the Government to help. That is the irony of the NSEL issue – that the 13000 investors are not sure what to do without Government support and that is what is perhaps weakening and delaying the resolution of the NSEL matter. Blaming one or many persons is not going to help anyone recover their dues. I reiterate the Government must act fast to ensure all investors get back their money so invested in or via NSEL.
Is NSEL an ‘exchange’? An exchange (or bourse) is a highly organized market where (especially) tradable securities, commodities, futures and options contracts are sold and bought. Emphasis is on “highly organized market”. The term ‘bourse’ is derived from the 13th-century inn named Ter Beurze in Bruges, Belgium, where traders and foreign merchants from across Europe conducted business in the late medieval period. The building, which was established by Robert van der Buerze had operated from 1285. Its managers became famous for offering judicious financial advice to the traders and merchants who frequented the building. This service became known as the "Beurze Purse" which is the basis of ‘bourse’, meaning an organized place of exchange. Eventually the building became solely a place for trading in commodities. So is NSEL a highly organized market where tradeable securities, commodities, future and options contracts are sold and bought? Do the 13000 investors answer this question? Or the Government?
But the registrar of companies, Mumbai, with "open eyes" knowing well that the company is promoted by a private party allowed the exchange to use the word National in its name.
Then, what is the next thing the "open eyes" of the NSEL investors see? They saw the names of the owners. One was Financial Technologies, a company that was promoted by the leading personalities in the commodities market and the second and more important was National Agricultural Cooperative Marketing Federation of India (Nafed). Nafed was directly under the ministry of agriculture. The ministry appointed its top officials.
A PTI report of August 2010 quoted Nafed Chairman Bijender Singh saying the following, "On July 29, I met agriculture minister Sharad Pawar and requested him to appoint a new managing director in Nafed. I am glad he has accepted my demand and made Sanjeev Chopra, an IAS officer of the 1985 batch, as the new MD."
Thus, the "open eyes" saw IAS officers running the show at Nafed and these were appointed by the minister himself. NSEL in its website and other promotional material projected Nafed as its promoter. To find that Nafed had only 0.01 per cent shareholding, would have required a little more than just open eyes. Yet, with "open eyes" Nafed and its brass were mute spectators to what was happening.
What else did the "open eyes" of an NSEL investor see? The open eyes saw that the ministry of consumer affairs had issued a gazette notification allowing the exchange to operate certain "one-day forward contracts" subject to certain conditions. The notification is for exemption. It does not say that the exchange is "unregulated" and therefore "unsafe" in so many words. Any unsuspecting person of ordinary mental ability would expect the ministry laying down these conditions to take necessary steps to ensure that these conditions are followed. But it turns out that the ministry of consumer affairs with "open eyes" watched when the conditions were being breached. The "open eyes" of NSEL investors saw the mission statement of NSEL. Among other things it said, "The exchange provides counterparty guarantee in terms of quantity, quality and payment. Hence, participants get a safety net against credit risk and counterparty default."
At last, the "open eyes" could also see the clout of the promoters of NSEL in the government during the months leading up to the issuance of licence for another exchange promoted by the same promoters to trade in the equity markets. The "open eyes" saw the regulatory orders being reversed, the authors of these orders being thrown out. The eyes were wide open, like the minister said, but what they saw was completely different from what they see today.
This article appeared in Business Standard: Check the link:
http://www.business-standard.com/article...
Do not consider NSEL to be a unregulated exchange, it was only an exchange that was granted certain exemptions by the government to operate as an exchange.
Which means, when those pre-conditions (against which exemptions were granted), when violated, it automatically deemed to be regulated (by the exempting authority - i.e. government).
In other words, when exchange started trading in certain settlement cycles, which was not covered in the exemption list, it should have been automatically regulated by government. Now government did not take up this seriously, and therefore the entire responsibility of investors money with interest for the delay is the responsibility of the government.
Further, pls think it over, "can there be anything unregulated by government" in any country, its ridiculous. Let us assume that, somebody commits an altogether unique crime of which we do not have any criminal code in our country and the crime being unique and happened for the first time there is no record of earlier judgement also . Can our government say, our law books do not have any provisions to punish the criminal here and therefore he can be set free. Therefore whether you accept it on paper or not (I mean, regulated or exempt, or unregulated), law of the land should take care of the innocent and punish the criminals. NSEL is no exemption in that angle.
Government just cannot say we have not been regulating this exchange and therefore it does not come under the preview of government. Having said that, NSEL is not falling in this category at all. It was operating much like any of the other regulated exchanges, it was only carrying certain exemptions, and thats all.
In case of NSEL the exemption was granted by government with certain preconditions to operate as an exchange and therefore any violation of the precondition amounts to the exchange coming under regulation. It is certainly the failure of the government to have not regulated it forthwith the first sight of a violation.
Investor has every right to claim the money invested with NSEL that too with interest for the delay. Think it over.
Comments pls.
It is now very clear, that borrowers have not given collateral.
They have gone short in the market (which was not supposed to be allowed by the exchange) and borrowed money from investors.
That is the reason for inadequate stocks in the warehouses.
Company like NK Protein, who is the top borrower happens to be the relative of the board chairman. All these facts convey us that the major reason for crisis is loud and clear. In this stage, government instead of taking control of the exchange and bailing out the investors with a bailout fund (as done in the US) and recover the money bailed out slowly from the entities in a structured manner. It can have a government appointed nominee on the board (not one or two but say three to five), ---- government is simply going cool about it....
It looks like government is viewing this scam similar to a stock market scam, or a chit fund scam; without understand the fact that this is totally different and the trade was executed on an exchange platform (unlike other scams), where by virtue of constitution of exchange, there has to be a trade and settlement guarantee. Government cannot simply say its a corporate level scam and companies are involved it, etc.... all these are bull shit...
Mr. Mayaram must know that investors of NSEL have executed their trades through an exchange (allowed by the government to operate as an exchange) and the interest of investors is to be taken care of at all times - no matter whether it is a corporate scam, broker scam or exchange scam. Stock Market scams are different because investor there knows that he is taking risk of the stock price fluctuating either ways, such is not the case here.
Mr. Mayaram's comment as follows " you guys are well informed investors, then why did you invest in NSEL trades" is ridiculous, he has to understand company of the order of MMTC is also in the queue for recovering its money - does he mean to say a retail investor will have more information than MMTC.
World is watching us and any stupidity like certain statements by Mr. Mayaram will tax our country heavily and FIIs will run away from India and wind up all their existing investments.
Need of the hour is to fight without getting tired till we all get our money back and in full. Pls note it is not a big money if government thinks to solve the crisis, it is only less than 5% of the money in the recently passed "Food Security Bill". We you look into money involved in corruption, it may be less than 1%. Consequently, the investors aim is to convince the FM to bail them out. I have some hope on PC, as he is reforms and investor friendly FM. Having said that PC still has not come forward on this yet after both the teams appointed by govt have submitted their reports.
Please read my detailed posting on this elsewhere in this blog. Thanks for the reply.
Investors have to fight to uphold their rights. It is the investors who make the stock and commodity brokers live. Without investors there is no stock or commodity broker or for that matter the economy itself.
Right from Harshad Mehta days we have seen number of scams and at every scam a new measure is taken by the government so that similar event does not reoccur again. Our government has always be reactive and never proactive.
We have come across duplicate share certificate scam -
govt came out with demat plan.
We have seen stamp paper scam -
govt came out with franking of stamp papers plan.
We have come across illegal exchanges functioning with derivatives -
govt. banned such exchanges and we brought in
derivatives in the year 2000.
But every reactive plan though was good enough to ensure its non-reoccurance; criminals kept challenging with their new ideas and strategies.
Now for the first time we had a problem with the exchange itself, which was not expected even by government (probably that could be the reason why this exchange was left out of regulatory setup). Having witnessed this scam, our government will wakeup and come out with something as a plan such that again such episode does not crop up.
We have seen enough of this. This is the time all the investors (also stock brokers) to resolve that we fight for our right and justice.
If investors (when I say investors I mean all the investing community, equity included) and brokers (when I say brokers I mean all the brokers - equity included) do not support the NSEL investors, pls remembers, our system is not scam free, we will have some other scam tomorrow and these investors naturally wont come to support. Therefore, I call all the investing community and stock and commodity broking community to support and fight for the NSEL investors.
We have auto rickshaw union, lawers union, medical students union, chaprasi union, labor union, etc. Can we (investors) have unity to support each other.
We cannot depend on the legal system, which is time consuming process on one hand and on the other our legal system still works on codes written 100 years back. They are still probably studying "Saloman Vs Saloman" case for joint stock companies. It is important to note here that - the recent judgement on life sentence to the rapists is only because of nationwide support and pressure, if it was not so, the maximum punishment could have been just 5 years to the guilty. Coming back to the point, what I want to emphasize here is the fact that our company law should change and we still cannot have clauses like, members will come members will go and the company will live on for ever, company and the members are different, and so on ( I am referring to FT here). The business dynamics have changed, the white color crimes are so sophisticated that the old codes have either no punishment or the punishment is grossly inadequate. Are we not seeing white color criminals enjoying their life in the society - thought they are supposed to be behind bars.
I can write a big list of such people but the purpose of writing this is not to fight for sending the wrong people back into jail but to fight for our rights. We have to be united and fight for out rights. In no circumstance we can be left to sympathy - The weapon we have (and it is a "brahmastra" please mark my words) is to shut all the exchange platform indefinitely, in the eventuality of any injustice to the investing community. Which anyway I don't think is required if all the investors are taken care of, by the meeting on 18th.
Look at the following costs levied by the commodity broker to the end clients. Unlike the stock market transaction, where all the statutory levies are clearly mentioned on the contract notes, the contract notes for trades done on NSEL does not specify all the statutory duties in the contract notes. They are directly debited to client's ledger.
Here is the list of such levy: Only the first two items are shown on the contract notes, the balance are directly debited to client's ledger
Brokerage (for the broker)
Service Tax on brokerage
Exchange Transaction Charges
Service Tax on Exchange Transaction Charges
Delivery Allocation Charges
Service Tax on Delivery Allocation Charges
CNF Billing Charges (it is charged at flat rate not a percentage)
Service Tax on CNF Billing
Stamp Duty
VAT (this is reversed at the end for retail clients who trade for interest yield).
All the above levies are charged on each leg of transaction. In other words, investors pays all the above charges at the time of first leg of transaction when initiated and also when he initiates the second leg of transaction.
Noteworthy is; but for brokerage and service tax on brokerage none of the charges are shown on the contract notes. They are directly debited to the clients' ledger. God only knows whether such debits to the client account is paid to the government or swallowed by the member broker. I think government should undertake investigation also at the broker level to unearth this fact. As a matter of fact if brokers have not paid this to the government there is a lot of money available at the broker level and a penalty can be levied on them which will ensure fund inflow for the settlement of investors.
On the other hand I want all of you to think, as to why we all have to pay towards "Delivery Allocation Charges" and also Service Tax there upon, when exchange is executing the trades of investors without adequate stocks available with them.
Think it over and let us fight this out with unity. Let us not fight for losing battle.
Moneylife has been constantly writing about their inefficiency but their godfathers at the MOF blissfully ignore because they expect post-retirement offices in any of them!
E-series physical delivery is as good as not happening.
HELP SMALL INVESTOR!!!
Read comments here
https://http://www.facebook.com/stuckinnationalspotexch...
A rough collection plan was worked out (as the the data available on the public domain) and was posted elsewhere in this forum.
In the mean time investors must have been happy seeing the news that five of the defaulters (out of 19) have promised to settle the dues to the tune of Rs.1330 crores. This is certainly a good news indeed.
As a matter of fact this amount was not included in my rough work calculation ( you can see this elsewhere in this forum posts). Therefore this recovery is an additional resource for the settlement of dues.
Money control has reported this good news some 20 hours ago on their website. Pls click the following link and read it.
http://www.moneycontrol.com/news/cnbc-tv...
If things go well like this, I am of the opinion all the investors will get back their money in full.
Investors having waited patently for so many days will have to wait for another just few days for the outburst of good news for them. I am very positive on the outcome and this positive thinking alone is the need of the hour.
Pls check the following link:
http://www.business-standard.com/article...
The article is pasted below:
Several listed firms which have exposure to the National Spot exchange are not informing shareholders of their positions thereby violating the disclosure requirements in the listing agreement.
MMTC, Technocraft Industries, Metkore Alloys and Southern Ispat are some of the listed who have exposure to National Spot Exchange either as a buyer or seller.
Depending upon their exposure and involvement they face several consequences ranging from financial loss to even criminal liabilities depending upon their involvement in the crisis. But none of these companies have informed the details of their affairs with NSEL.
Sharad Kumar Saraf, convenor of NSEL Investor Forum and managing director of Technocraft Industries said, “We are in the process of recovery. So far, it was not considered doubtful. But we may take that step now and inform (the exchanges).”
According to Saraf, Technocraft had an investment of Rs 20 crore. When asked why there was no information to the shareholders for nearly two months since the crisis broke, Saraf said, “We have been receiving part payments. The last (full) payment made was on July 30. So it’s only about 40 days. Even after this we have received part payments.”
Technocraft Industries’ exposure also raises questions as to what a manufacturing company was doing in a paired contract investments in a spot exchange.
The figure of Rs 20 crore which Saraf gave is roughly a third of Rs 64.7 crore profits made by Technocraft in FY12-13. It is two-thirds of June quarter net profit of Rs 30 crore
Similarly, MMTC’s exposure of Rs 220 crore is over three times the loss of Rs 70.62 crore it made in FY 12-13. The company has kept quiet so far.
The substantial exposure shows that these investments are significant and could materially affect the financial position of the company.
Southern Ispat and Metkore have been named as companies which owe money to NSEL.Metkore was named as the buyer of some 23,074 tonne of Ferrochrome and had to pay Rs 114 crore.
On the other hand, Southern Ispat was named as the client of Juggnaut projects and owed Rs 24.44 crore towards steel contracts. Various investigative agencies and regulators are probing the Rs 5,600 crore payment crisis and an official report by a high-powered committee of secretaries is expected soon.
Investors transacted through paired trades through which they opened positions by buying commodity on T+2 settlements and squared these off by taking a reverse position in T+25 settlements. On the borrowers’ side, these trades would have been a ‘sell’ on T+2 and a ‘buy’ for the same quantity on T+25.
On July 31, NSEL had deferred the settlement by 15 days. A couple of days before the scheduled settlement on August 15, it sent some ledgers and reports to borrowers, showing their transactions and outstanding dues.
In arbitration petition filed with the Bombay High court, Tavishi Enterprises, the company promoted by Harimohan, brother of Mohan India’s Jagmohan, has said NSEL provided a ledger containing the details of Tavishi transactions for the period between April 1 and August 12. NSEL claimed Mohan India and Tavishi together owed about Rs 1,000 crore.
The petition said, “Upon review of the said ledger, the petitioner was shocked and surprised to learn about the entry in the ledger for the dates August 8 and August 9 …being member delivery obligations for Rs 168, 35,39,433 and Rs 179, 75,23,990, totalling Rs 348,10,63,243.”
Tavishi argued since the settlement was deferred to August 15, these entries weren’t valid. “In any case, no delivery of the commodity sugar, for whatsoever amount, has been made to the petitioner.”
The petition added if it was the exchange’s position that a delivery was made on August 8 and 9, it would have been in violation of its own circular deferring settlements by 15 days. Calling the entries by the exchange “fictitious”, Tavishi said if these were removed, it was not liable to pay any amount to the exchange. It argued the exchange had unilaterally fixed the outstanding and payment schedule on August 14. However, the exchange had, in releases, suggested the schedule was agreed to by the borrowers. Tavishi said it “was shocked” at such unilateral announcements.
S S Dhingra, a Delhi-based NSEL investor who had studied the petition and ledger entries of NSEL, said these clearly showed the money hadn’t come to the so-called borrowers at all. “In the ledger account, the only entries are of commodity payout and funds pay-in settlement, which is the accounting entry for the borrower’s T+25 transaction. My question to NSEL is where is the T+2 transaction entry for the borrower?” he asked, adding the ledger entries showed the exchange’s claims were far from the truth. “It is evident from the documentary evidence NSEL’s claim that the borrower of Sugar Delhi (being the commodity I have invested in) having the investor’s money and that it is their obligation to pick up the commodity (sugar) and pay to the investor is all bogus and manipulated,” he added.
Holding Jignesh Shah, promoter of the Financial Technologies group that promoted NSEL, responsible for the crisis, Dhingra said he was planning to move court for fixing criminal liability on Shah and winding up of Financial Technologies.
Between July 31 and August 16, when the crisis deepened, the MCX stock fell as much as 65%. Shareholders like NSE, which had a 2.45% stake, offloaded most of its holding, while BNP Paribas sold some of the shares it recently bought. Bank of India, another institutional shareholder, exited completely, selling 5.25-lakh shares (or 1.03% stake).
The only buyer since the NSEL scam broke out was HDFC Mutual Fund, which acquired around 3 lakh shares, according to NSE data on bulk deals.
However, since August 17, the stock has risen 77%, despite problems associated with the FT group, which holds 26% in MCX, the country’s only listed commodity exchange. In each of the last nine trading sessions, the stock has hit the 5% upper circuit.
“Somebody is obviously buying the stock,”
“The question is who these parties are and what value they see in the stock given the uncertain future of NSEL’s promoter (Financial Technologies) in controlling the exchanges.”
The buzz is a leading investment bank is advising FT on a possible stake sale in MCX and the Kotak group is keen to acquire the bourse. A highlevel government task force headed by Arvind Mayaram, economic affairs secretary, is expected to submit a report by September 12 on violations committed by NSEL.
Investors and brokers think that regulators and law enforcement agencies could act against the promoters once the report is submitted.
Some of the major shareholders of MCX as on June 30 were
Aginyx Enterprises with 4.79%,
IFCI (4.79%),
Passport Capital (4.9%) and Merrill Lynch Holdings (2.79%).
(The above information is available in The Economic Times today's edition).
The price rise in MCX shares is a good thing for the investors (whose money is stuck with NSEL), in the eventuality of FT selling its stake in MCX to pay the investors.
Amt in Rs.Crores
MCX (26% of Gignesh Shaw's share) 550 M.Cap
FT (100% being promotor company) 500 M.Cap
Settlement Guarantee Fund of MCX 232
Settlement Guarantee Fund with MCX SX 1650
Settlement Guarantee Fund with
other exchanges (owned by FT) ??
Recoveries from Stock Sale 500
Money Trial 2500
Liquidation of Defaulters
(conservative estimate) 500
Promoter's personal properties 500
Government (if it reverses the
service tax component from the
day one of scam) 200
FT's investment in other
five international exchanges 500
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Total 7632
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Note: Settlement Guarantee Fund is a crisis fund and is earmarked for a specific purpose. When the promoters are going to be labeled as "unfit and improper" to hold the rights of running the exchange, then the exchange run by Mr. Gigjesh Shah (viz. MCX and MCX - SX along with five other international exchanges shall not function) in such a case why not shift the SGF available in other exchanges to NSEL and pay the retail investors. This is a proper thinking and no body can dispute it. Secondly if the exchange is to be sold to another party - be it Reliance or Kotak or anyone (let that party bring in funds to run the exchange with adequate SGF). Therefore, investors money can be paid back in full. Alternatively, Govt can do all what I have mentioned at their own sweet leisure and pay all the retail investors at once and in full. Pls note the above is only my rough estimate based on the information available on public domain. The committee set up by Government (two committees with enormous powers) can make the picture much brighter for the investors. Let us keep the fingers crossed till 7th. Your view on this is most welcome.
Worth considering to implement ASAP.
Amt in Rs.Crores
MCX (26% of Gignesh Shaw's share) 550 M.Cap
FT (100% being promotor company) 500 M.Cap
Settlement Guarantee Fund of MCX 232
Settlement Guarantee Fund with MCX SX 1650
Settlement Guarantee Fund with
other exchanges (owned by FT) ??
Recoveries from Stock Sale 500
Money Trial 2500
Liquidation of Defaulters
(conservative estimate) 500
Promoter's personal properties 500
Government (if it reverses the
service tax component from the
day one of scam) 200
FT's investment in other
five international exchanges 500
-----
Total 7632
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