Investors keep fingers crossed as blame game continues

Kamlesh Jain has dark circles under his eyes, the result of several sleepless nights spent agonising over his eroding investments in NSEL products.

He had set aside this money for his future medical expenses. He never thought he would need the money so soon. He is now unwell but tragically, the reserve is no longer at his disposal.

As luck would have it, Jain invested Rs 27 lakh on the last day when NSEL shut trading. A chartered accountant by profession, he was not even remotely connected with his investments in wool, steel and paddy. He was advised by brokers to deploy his money in NSEL from the liquid and debt mutual funds as the returns there had turned negative.

Jain said he never thought that he would end up in this mess as he had been investing in the exchange for last two years and earning 17 per cent return a year.

“With about 80-90 per cent of my equity investment almost wiped out in the recent market crash, I’m now counting my stars. I have not slept for the last one month,” said Jain, who was the most vociferous among the protesters outside Financial Technologies office in suburban Mumbai on Wednesday.

Like Jain, Ramesh Kumar, another NSEL investor, is keeping his fingers crossed. Employed with a private company, Kumar has no clue on when he will get hold of his Rs 35 lakh investment made in the exchange.

“The exchange blaming the defaulters is stupidity. The exchange is the counter guarantor for all the deals executed on its platform,” he said.

Raising questions on how the exchange allowed fly-by-night operators to take huge positions without any credit rating, Kumar wants to know why the exchange relied just on the post-dated cheques issued by these unscrupulous operators.

The Income-Tax Department can easily spot the money trail as all the deals on the exchange are done through cheques. The Government should crack down on the promoters and defaulters before the money is siphoned off, he said.

Defending the broking firms in NSEL fiasco, Ashish Shah, AVP, Sushil Global Commodities, said the broking firms are facilitators of the exchanges across various segments for safer and better returns for investors. Since the exchange was part of the group which runs a vibrant and the leading commodity futures exchange in India and also belongs to a well known IT company, everybody trusted it.

“Many times, exchange officials would also come to meet us as well as some of our investors and give assurance about the settlement process, risk management and overall functioning,” he said.

The broking firm had an exposure of close to Rs 25 crore and has received about Rs 3.5 crore in the first two settlements made by the exchange.

suresh.iyengar@thehindu.co.in

COMMENT NOW