NSEL ex-chief Anjani Sinha blames former management,himself for crisis

for their personal benefits and demanded a judicial inquiry against them,according to an affidavit filed before a local court in Mumbai.

NSEL sacks CEO Anjani Sinha,appoints OSD,repays only Rs 92 cr to investors

National Spot Exchange Ltd (NSEL),promoted by Jignesh Shah-led Financial Technologies (India) Ltd,is facing the problem of settling Rs 5,600-crore dues to 148 members/brokers,representing 13,000 investor clients,after it suspended trade on July 31 on government’s direction.

NSEL appoints Saji Cherian as new CEO after sacking Anjani Sinha

Sinha has found fault with business development team for introducing buyers with bad credentials into the NSEL system.

He also blamed the warehousing team for not having adequate control on physical stock and also for making “false stock statement”.

“The violation done by the warehousing team is the most severe. The weakest link in the entire episode is the warehouse management,” Sinha said in the affidavit.

He also admitted submitting “wrong stock statement” to the Board and regulator FMC based on the report by the warehousing division.

Taking the blame on himself for not informing the Board about increasing exposure and risk of widespread defaults,Sinha said the management allowed the exchange to function and did not stop trading due to fear of wide spread defaults.

“By 2011-12,the scenario was such that if we do not allow rollover,buyers have defaulted with huge amount. On the other hand,if we continue to allow him to rollover his position,his exposure keeps on increasing every year by 20-25 per cent due to impact of rollover cost and exchange fee,” he said.

Citing several instances of misrepresentation of stock position and fund diversion by buyers,Sinha said buyers diverted funds availed through fictitious sale transaction to buy real estate and other properties.

NSEL has been able to settle just about Rs 137 crore out of Rs 5,500 crore outstanding so far to the 13,000 investors.