Distressed Investors Want NSEL To Invoke Settlement Guarantee Fund
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The National Spot Exchange Limited (
In a strongly- worded letter to Saji Cherian, the current managing director and CEO of NSEL,
“To our surprise in spite of passing of 14 months after the default of NSEL and several reminders from our side, you have not invoked this clause. We know from
He further added, “Please let me know what is the reason behind dithering on this front as 13,000 families can get some relief if you invoke this clause and reconstitute the SGF which is clearly mandatory as per your own by-laws signed by all 'clearing members' i.e. brokers of NSEL.”
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“We observed pay-in shortages on a daily basis, with regard to the settlement-related payment obligations from various members. All these shortages were substantially in relation to paired contracts. The exchange made the pay-out obligations against the pay-in shortage of paired contracts out of the available SGF cash balances. This resulted in depletion of the SGF cash balances,” the auditor had said in a supplementary report last year.
According to bye-law no 12.9.2 of NSEL, "If the cumulative amount under all the above heads is not sufficient, the balance obligations shall be assessed against all the clearing members in the same proportion as their total contribution and deposit towards security deposit, and the clearing members shall be required to contribute or deposit the deficient amount in the Settlement Guarantee Fund within such time, as the Relevant Authority may specify in this behalf from time to time," emphasized Shah in his email.
Shah has also demanded an immediate response from Cherian and has warned that a lack of response would be held against him in the court.
Shah has also made the email communication to the Ramesh Abhishek, chairman of FMC as well as Minister of Commerce and Industry, Nirmala Sitharaman.
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The NSEL investors, on Saturday, filed a Special Leave Petition in the Supreme Court, challenging the Bombay High Court order granting bail to prime accused Jigesh Shah.
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