September 26, 2014 3:25:05 pm
NSEL Investors Forum has written to Securities and Exchange Board of India (Sebi), highlighting “misrepresentations and suppression of material fact” by the Financial Technologies (FTIL) in its press release dated September 16.
FTIL in its release had said that the Government cannot merge National Spot Exchange (NSEL) with FTIL since interests of the 13,000 clients who traded on NSEL cannot be termed as “public interest” and the Government can only merge two companies under the Companies Act if it is essential in the public interest.
FTIL had said ”The interest of the 13,000 clients of the brokers who traded on NSEL platform for higher returns (hereinafter referred to as the “Trading Clients”) cannot be termed as “public interest” when 66% of the entire outstanding amount is being claimed by just 6% of the Trading Clients (i.e. by just 781 persons).”
NSEL Investors Forum argues that the amount outstanding of each investor is not relevant. All investors including 94% of small investors as claimed by FTIL have in fact invested a large portion of their wealth simply because NSEL(which was controlled and masterminded by Jignesh Shah and FTIL induced them to invest promising safe fixed return arbitrage (With full knowledge of FTIL).
Subscriber Only Stories
These small investors are now virtually on the street. Apart from these, commodity trade in India has fallen by nearly 60% in last year clearly showing that investors have lost interest in Commodity Exchanges, thereby affecting the commodity trade and economy in general. This is nothing but public interest. The top 6% investors also include PSUs like MMTC and PEC where direct public money and hence public interest is involved. Such investors also have a larger stake in economy which gets hurt if their sentiments are affected. There will also be a direct loss to the exchequer by 30% of Income Tax setoffs claimed (About Rs 1600 Crores) due to the scam which is passed on to the common man for the fraud perpetrated by FTIL.
An e-mailed query has been sent to FTIL, which is still awaiting a response.
Jash Kriplani | The Financial Express
📣 Join our Telegram channel (The Indian Express) for the latest news and updates
- The Indian Express website has been rated GREEN for its credibility and trustworthiness by Newsguard, a global service that rates news sources for their journalistic standards.