NSEL opens escrow account
Crisis-ridden National Spot Exchange Ltd (NSEL) has opened an escrow account as directed by the government to ensure payouts on priority to about...
Ensuring payouts on priority to 8,000-odd small investors
New Delhi (PTI): Crisis-ridden National Spot Exchange Ltd (NSEL) has opened an escrow account as directed by the government to ensure payouts on priority to about 8,000 small investors stuck after the exchange halted trading. The bourse has to settle Rs 5,600 crore of dues after it suspended trading in all contracts recently on directions from the government. It has said it will submit a settlement plan by August 14 and has set up a four-member panel to monitor the process.
The government has empowered the Forward Markets Commission (FMC) to oversee the settlement. "NSEL, in line with FMC guidelines, has opened an escrow account for making payment to investors with dues below Rs 10 lakh," the exchange's spokesperson said. The exchange has to ensure the settlement of dues to approximately 13,000 investors. Of this, small investors with dues below Rs 10 lakh are about 8,000, he said.
The Consumer Affairs Ministry and the FMC have asked the NSEL to ensure that small investors get priority in the settlement of dues. "Priority will be given to small investors in the NSEL settlement process," Consumer Affairs Minister K V Thomas had said.
According to sources, NSEL has roped in Switzerland-based SGS to audit stocks across 89 godowns of the exchange. NSEL holds about Rs 720 crore in its settlement guarantee fund, of which Rs 65 crore is in cash, with the remainder as warehouse receipts, sources added. According to NSEL, 21 entities owe nearly Rs 5,600 crore to investors, with the maximum liability of Rs 929 crore from N K Proteins.
Eight of the entities have said they will pay their liability on time and 13 have agreed to pay 5 per cent of their total dues every week.