Mounting the pressure on the Government and regulatory authorities, the NSEL Investors Forum has urged the broking community to halt trading for one day on the Multi Commodity Exchange, part of Financial Technologies, which owns the National Spot Exchange that owes Rs 5,600 crore to investors.
Addressing investors in Mumbai on Thursday, Sharad Kumar Saraf, Chairman of the Forum said that the protest would be intensified by asking brokers to stop trading in other exchanges for a day, and then extending the shutdown to MCX for three days.
The Forum has said it would also ask the Government not to renew the MCX Stock Exchange licence when it comes up for renewal next month.
Saraf said the destination for the next agitation by the Forum would be in front of Jignesh Shah’s (promoter of NSEL) residence at upmarket Juhu in Mumbai. “We want to inform neighbours of Shah who is living amidst them,” he said.
Pravin Jain, an investor in NSEL, has sent an email to the Monetary Authority of Singapore detailing the developments in India. He has urged the Authority to declare Shah, who owns the Singapore Mercantile Exchange, as a not “fit and proper” person to run the exchange. The Singapore Mercantile Exchange is a wholly-owned subsidiary of Financial Technologies.
“I have received a reply from the Authority stating that they are already aware of the happenings in India. They assured us that they will take action, but cannot share the details with an individual like me,” said Jain, who is now preparing a similar email to regulatory authorities in Dubai and Bahrain where Shah owns exchanges.
Meanwhile, the Investor Protection Group, not formed by investors of NSEL, has filed a public interest litigation (PIL) in the Bombay High Court to appoint an administrator to resolve the settlement crisis in the exchange.
Dubbing the PIL as a ploy by Shah to keep the Government and regulatory bodies out of the mess, Anshuman Tanna, member of the legal sub-committee of the NSEL Forum, said the plea would not be accepted, as the Investor Protection Group is not an affected party to the ongoing agitation.
“We were ready with a writ petition after the exchange decided to make discretionary payment to investor with less than Rs 10 lakh exposure. Had we filed the petition in the court, we would have antagonised 6,500 small investors and attracted the wrath of the media for thwarting small investors’ benefits,” he said. The forum did not want to fall into the trap laid by Shah, he added.
The Forum has also requested all investors to register themselves by remitting Rs 5,000 as a membership fee. Currently, it has 300-odd members.
Bourse gives out client-wise dues
The beleaguered National Spot Exchange has come out with client-wise pay-in obligations of 39 clients through 24 buyer members. The list has a subsidiary of large corporate houses owing crores of rupees.
NK Proteins has dues of Rs 1,054 crore, with two clients Darshan Baldevbhai Patel (Rs 419 crore) and Tirupati Retail (Rs 634 crore).
PD Agro Processors owes Rs 678 crore, with Dulisons Cereals (Rs 51 crore), Dulisons Foods (Rs 576 crore) and Dunar Food (Rs 51 crore).
With outstanding of Rs 810 crore, Ark Imports has five clients, Genex Industries (Rs 66.30 crore), Gurdev Wools and Fibers (Rs 18 crore), Karan Sales Corporation (Rs 35 crore), Punjab Wool Traders (Rs 36 crore) and Shakun Polyplasts (Rs 654 crore). Mohan India owes Rs 575 crore.
Earlier, the exchange had declared 10 members as defaulters after they failed to meet their payment obligation in the second payout schedule on Tuesday. Another nine were declared defaulters for not meeting their obligation in the first payment cycle.
Of the 24 members who owe Rs 5,600 crore, 19 have been declared as defaulters.