National Spot Exchange Ltd for action against Lotus Refineries on Rs 252 cr claim,company denies

NSEL has proposed to initiate default proceedings against Lotus saying that it owes Rs 252 crore to investors.

Crisis-ridden National Spot Exchange Ltd (NSEL) has proposed to initiate default proceedings against Lotus Refineries saying that it owes Rs 252 crore to investors,a claim the company has disputed.

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Lotus has written to the commodity market regulator FMC disputing any payment obligation. The Mumbai-based company makes a wide range of edible oil products.

The Forward Markets Commission (FMC) has,meanwhile,sought comments on the issue from the National Spot Exchange Ltd (NSEL) at the earliest.

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In a directive to the NSEL,the regulator said it has “received a letter from Lotus Refineries Pvt Ltd disputing their pay-in obligation. The comments of the exchange may be forwarded at the earliest”.

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NSEL has proposed initiating default proceedings against the Lotus Refineries for pay-in obligation of Rs 252.56 crore,FMC said.

That apart,the FMC has directed the spot exchange not to make payment of Rs 1,159.55 crore to its related entity Indian Bullion Market Association (IBMA).

NSEL has 60.88 per cent equity and common directors in the IBMA. The regulator has asked the bourse to provide information about shareholding and directors of IBMA besides details of all trading members and clients attached to this association.

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NSEL,promoted by Jignesh Shah-headed Financial Technologies India Ltd (FTIL),was engulfed in a crisis after it suspended trade on July 31,raising concerns about possible default of Rs 5,600 crore due to investors,including 7,000 small investors.