NSEL forms trade settlement panel; to prepare payment plan by 14th Aug
Moneylife Digital Team 05 August 2013

National Spot Exchange -NSEL constituted an independent committee to monitor trade settlements worth Rs5,000 crore for which the Exchange would announce the payment plan by 14th August

National Spot Exchange Ltd (NSEL) on Monday formed an independent panel for advising and monitoring settlement of trade worth Rs5,000 crore. The Exchange will prepare a payment plan by 14 August 2013, but trade settlement may take up to five months.

 

“The Committee would monitor the pay-out of dues as decided in consultation of Forward Markets Commission (FMC). All plant owners and processors will submit their plan for payment of outstanding. NSEL will collate the plans and finalise the pay-in and pay-out in consultation with FMC by 14th August,” said Jignesh Shah, chairman and managing director of Financial Technologies India Ltd (FT), one of the promoters of NSEL.

 

The ‘oversight committee’, as it is called would have Sharad Upasani, former chief secretary of Maharashtra, Justice RJ Kochar, GN Bajpai, former chairman of SEBI and D Sivanandan, former director general of Police.

 

Shah, who is also vice-chairman of NSEL said, “Payments would be made in a timely manner and the Exchange would regularly report to the FMC. Delayed payments would lead to 16% interest as penalty. Payments would be completed in a maximum of five months.”

 

NSEL has been in a crisis after it suspended trade in most contracts on 31st July. The decision to set up the independent committee was taken after a joint meeting on Sunday between the commodities regulator and NSEL along with investors.

 

On Sunday, NSEL said its eight members/processors were willing to pay about Rs2,181 crore as per the scheduled due date or earlier. Another 13 have offered to pay about Rs3,107 crore in weekly instalments, while negotiations are on with three processors, Namdhari Food International Pvt Ltd, Namdhari Rice and General Mills, and Lotus Refineries Pvt Ltd others for payment of Rs311 crore, the Exchange had said.

 

Shah said ‘all possible law enforcing measures’ will be taken against the members who default on payment. So far, three members with an outstanding of Rs311 crore against their names, did not come for the discussion on the payment schedule.

 

According to Shah, NSEL’s settlement guarantee fund has come down to Rs60-Rs70 crore from about Rs800 crore last week. This fund is the margin collected from the planters, who borrow working capital through the NSEL platform.

Comments
Nilesh KAMERKAR
8 years ago
Yeh bhi IPL hai BOSS!
arun adalja
8 years ago
as per mr shah fund has come down from 800 crores to 60 crores.is there any explanations from mr shah?this is nothing but scam.
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