NSEL investors' forum wants strong action by govt

The government should take stringent action in the Rs 5,600-crore National Spot Exchange Limited (NSEL) scam to revive the confidence of the investing public, said Sharad Kumar Saraf, chairman of NSEL Investors’ Forum. According to Saraf, only exemplary penal action will send out a strong message that fraud will not be tolerated Stock Market Tips

Saraf said nearly 93 per cent of the 58,000 shareholders of Financial Technologies India Limited (FTIL), the promoters of the now-defunct spot exchange, held just 6.82 per cent of equity. Most of the equity was held by 133 investorsconnected with the promoter, Jignesh Shah, and his associates, he said. Saraf was responding to comments made by Venkat Chary, non-executive chairman of FTIL, in an interview to Business Standard last Friday.

In the interview, Chary had stated the government’s proposal to merge was unwarranted and that FTIL shareholders did not benefit from higher dividends from NSEL Free Share Tips

Saraf, however, countered this by saying the balance sheet of FTIL for FY13 showed that “nearly 82 per cent of FTIL’s consolidated profit can be attributed to NSEL. The fact that NSEL accounts are still not finalised shows poor governance and indication of a fraud. FTIL was well aware about the NSEL fraud and there are reasons to believe that NSEL was created only to perpetrate the fraud.”

Saraf said the proposal of a merger between NSEL and FTIL was not made in haste, as stated by Chary, but after consideration of several forensic audit reports, departmental reports, charge sheets by the Economic Offences Wing, etc Intraday Trading Tips

The amalgamation of a company involved in fraud with its parent will set an example and will prevent other corporates from using this route to carry out a fraud. “It is very surprising that the government is silent on the PwC report,” said Saraf Nifty Trading Tips

The statement said: “Exchange by definition was a counter-guarantee institute. The investors were not aware about the quality and conditions of the defaulters. It is not the job of the investors to claim the refund from defaulters. The fact that NSEL has failed to make any significant recovery from the defaulters shows that they do not have the muscle or they lacked the will to recover or possibly there was a hidden nexus between defaulters and the NSEL management. The by-laws of NSEL and all other exchanges always provide exchange as a counter party to trade. The investors did not know anything about defaulters, since the payment was made to NSEL and the details of defaulters were not disclosed Personal Numerology Trading Tips