Three days after suspension of trading, the National Spot Exchange Ltd (NSEL) has come out with a repayment schedule with details of members’ payment obligation, which add up to Rs 5,599 crore.
The exchange, which held a joint meeting with the members, traders and the FMC to agree upon a payment schedule today, revealed its obligation for the first time, claimed that eight members have agreed to pay Rs 2,181 crore by the due date or even earlier, while 13 others have consented to remit five per cent of their dues every week, totalling Rs 3,107 crore.
Negotiations to recover Rs 311 crore from Namdhari Food International, Namdhari Rice and General Mills and Lotus Refineries are still on, said the exchange.
According to a second option discussed at the meeting, the exchange said it could encash the post-dated cheque of Rs 4,900 crore issued by some members against their settlement obligation. It also received confirmation from other members that they would remit Rs 699 crore regularly.
“While post-dated cheques are a commitment, the payout process may not roll out smoothly in a month’s time. Hence, the market participants opted to drop the second option,” it said.
Not enough time
The FMC (Forward Markets Commission) along with other government agencies would work together to ensure a safe and secure settlement of dues, the exchange said.
According to sources, the entire process of settlement is expected to be completed within five months. Deena Mehta, Managing Director, Asit C. Mehta Investment Intermediates, said the biggest mistake of the exchange was not providing adequate time for investors to unwind their open positions.
“At least three months should have been given. The stock exchanges gave six months to close investors’ buy position when it banned badla trading in 1992, 1994 and 2001,” she added.
Expressing confidence over meeting payment obligation, Anjani Sinha, Managing Director and Chief Executive Officer, NSEL said a final decision will be taken after consultation with stakeholders as the entire process of settlement would lead to long litigation in case of default by any member.
The exchange suspended trading and merged the settlement cycles of all one day forward contracts on July 31.
The said action was taken due to certain structural changes in the marketplace leading to disruption in trading interest, said NSEL.