Exchange officials to meet sellers & brokers today on payment plan
The embattled National Spot Exchange Ltd (NSEL) has agreed to settle Rs 5,400 crore due to over 10,000 investors within five months (20 weeks), at the rate of about 5 per cent every week.
The spot exchange has also informed the Forward Markets Commission (FMC) that it has collected post-dated cheques from 23 sellers who had outstanding positions before trading was suspended last Thursday.
On Saturday, FMC held a series of meetings with the board of directors of NSEL to discuss the issue and ensure smooth settlement of payments.
Ramesh Abhishek, Chairman, FMC, told Business Line that the exchange has also assured that it will take the assistance of top security agencies to provide extra protection to the commodities lying in the warehouse.
“We expressed our view that the exchange should swap the post-dated cheques of the sellers with bank guarantees as it is a more reliable instrument,” he added.
Denying that the spot exchanges will come under the ambit of FMC soon, Abhishek said no such instruction has come from the Government as of now.
“We are still in the process of seeking information on behalf of the Government. We were not convinced with the information given by the Managing Director (of NSEL) on Friday. So, we had called the entire board to discuss the issue in detail,” he added.
Asked whether FMC is convinced with the repayment schedule submitted by the exchange, Abhishek said: “That it is not the question of convincing us. Our hands are tied and we have no power whatsoever (to take action on the exchange). We will collect the information and pass it on to the Government which will take the final call.”
FMC, along with the exchange officials, sellers and brokers, will meet on Sunday to ascertain whether the payment schedule is acceptable to all.
NSEL said it will attempt to arrive at a consensus on settlement of dues tomorrow.
“The FMC officials have also asked for details of members, planters (sellers) and other participants who are not co-operating with the exchange in resolving the matter related to the settlement cycle,” NSEL added.
Deena Mehta, Managing Director, Asit C Mehta Investment Intermediates, said the amount the exchange owes is a fraction of the total agriculture trade in the country. The Government should rope in the help of an agency such as Nabard to liquidate the stocks lying in the warehouse. The RBI and the Government have lent a helping hand to banks and mutual funds during times of crisis.
“The Agriculture Ministry and Ministry of Consumer Affairs have blessed this institution (NSEL). This is after all a liquidity problem which is denting the image of Indian markets,” she said.