Investor forum for legal action against NSEL promoters

Investor forum for legal action against NSEL promoters

NSEL Investors Forum has said it will pursue “legal action” against the promoters of the troubled National Spot Exchange Limited (NSEL) if they tried to dispose of the assets of the promoter company, which was vehemently denied by Financial Technologies India.

“We will be compelled to take appropriate legal action, including criminal action against the promoters, if they proceed to dispose of any assets owned by the promoter company Financial Technologies (India) Ltd (FTIL) or its promoter Jignesh Shah, pending the settlement of the outstanding defaults,” Forum Secretary Arun Dalmia said.

Dalmia alleged that the promoters of NSEL are presently in advanced discussion with a prospective investor for the sale of a substantial part of shareholding in FTIL.

Any disposition of assets by FTIL in the present circumstances will seriously put at peril recovery of investors’ dues of Rs 5,500 crore. It is absolutely necessary to safeguard and preserve these assets till such time as the outstanding amounts are not paid to the investors, he said.

“We deny that there is any such move,” a Financial Technologies spokesperson said.
In its fourth default, the crisis-ridden NSEL on Tuesday announced the disbursal of only Rs 13.45 crore to investors, against the total commitment of Rs 174.72 crore.

In the first three pay-out schedules, the exchange had received Rs 120.10 crore from its 24 registered members and recorded a total deficit of Rs 409.56 crore. FTIL holds a controlling stake of 99.9 per cent in NSEL. Given that NSEL contributes to approximately 50-60 per cent of the overall profits of FTIL, it is only natural that its affairs were closely monitored by FTIL. Therefore, FTIL must have been aware of NSEL’s way of functioning, Dalmia said.