Aggrieved investors of National Spot Exchange and the broking community have joined hands to intensify their attempt to recover dues worth Rs 5,600 crore.

The move comes after the high-level panel headed by Economic Affairs Secretary Arvind Mayaram found only a “minor systemic” failure at the troubled exchange.

Giving in to investor demand at the NSEL Investors Forum meet on Friday, Motilal Oswal, Chairman and Managing Director, Motilal Oswal Financial Services said that the brokers would meet soon to consider a demand to halt trade for a day at MCX, the Group company of NSEL.

Apart from Motilal Oswal Commodities, other broking firms that have exposure to NSEL and stock exchange include Geojit Comtrade, IndiaInfoline Commodities, Anand Rathi Commodities, Aditya Birla Commodities Broking, Nirmal Bang Commodities, JM Financial Commtrade, Emkay Commotrade, Phillip Commodities and Systematix Commodities.

Oswal recently met with the board members of Financial Technologies to sort out the issue. Though the board was willing to bail NSEL out, they sought some time to arrange for finance.

Softening stance

“They told me that they have just transferred $90 million (about Rs 560 crore) to its foreign subsidiary. They sought three to five months to garner funds through sale of asset,” he said. There seems to be a softening of stand by Financial Technologies on the NSEL issue as its promoter Jignesh Shah has been telling investors to go after defaulters rather than target FTIL to recover their dues.

Motilal Oswal Financial Services has an exposure of Rs 253 crore in the crisis-ridden exchange. NSEL owes Rs 195 crore with respect to the positions taken by its clients on the trading platform offered by the Motilal Oswal Group and a proprietary trading account for Rs 57 crore. Another Rs 1.40 crore was of clients who were funded by the Group.

Earlier, Financial Technologies had provided a loan of Rs 177 crore to pay off small investors.

(This article was published on September 28, 2013)
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