Financial Technologies (India) Ltd (FTIL) on Tuesday said it has come up with a proposal to settle the dues of investors who have lost their money in the Rs 5,600 crore payment fraud at the National Spot Exchange Ltd that came to light in July 2013.
FTIL through its legal advisors had submitted a “without prejudice” proposal to the finance ministry on March 13.
“The proposal is made in the spirit of being fair, equitable and just to all parties and in the interest of over 63,000 shareholders of the FTIL. The proposal is subject to the approval by not just all the parties but also FTIL’s Board and shareholders,” FTIL said in a statement.
The FTIL proposal said that NSEL and its brokers will bring in Rs 500 crore each for the first round of payments to its 13,000 investors impacted by the fraud. Since FTIL has already given a loan of Rs180 crore to the commodity spot exchange for repayment, it will now put in Rs. 320 crore.
“The settlement proposal mandates participation of brokers for the exercise to be successful as the privity of contract of trading clients of NSEL are with their respective brokers,” FTIL said.
At least 7,053 small claimants who are owed below Rs.10 lakh will receive 100 per cent of their claim. The mid-level claimants that have lost between Rs10 lakh and Rs 1 crore, will receive 50 per cent of their claim, FTIL said. FTIL also proposed to completely settle the claims of the public sector units which have invested in NSEL.
However, a certain section of NSEL investors have already rejected this settlement plan. “We investors of NSEL summarily turn it (settlement proposal) down as it is unfair, inequitable and unjust. It would be worthwhile to note that FTIL chairman Jignesh Shah on 5 August 2013 promised NSEL investors 100 per cent payment with 16 per cent interest..,” said a statement by NSEL Investors’ Action Group.