National Spot Exchange Ltd (NSEL),which is struggling to make payment of Rs 5,574 crore to investors,has admitted that there is significant stock shortage in the warehouses where physical stock of outstanding contracts were supposed to be kept.
In 9 warehouses relating to 7 defaulters,significant stock shortage has been found, NSEL said. This indicates defaulters were trading in commodities without adequate physical stocks. In respect of 29 warehouses relating to 11 defaulters,the SGS audit team was not allowed inside the premises. SGS has to finish/submit report for 2 more warehouses relating to 2 parties, NSEL said. SGS was appointed by NSEL to check the warehouses for the physical quantity of underlying commodities in which contracts were signed. As per Forward Contract Regulation Act,1952,forward contracts in commodity markets entail that all the contracts must eventually result in delivery of the commodities. Why the SGS team was not allowed inside the warehouses? Simply because there arent enough stocks of commodities. This calls for stringent action against the exchange and its officials, said an official.
On the other hand,NSEL has defaulted on the payment commitments for the fourth round of settlement. It could pay only Rs 7.77 crore to investors out of scheduled Rs 174.72 crore. In the previous three rounds,NSEL got only Rs 120 crore against receivables of Rs 524 crore.
Alok Churiwala,vice-chairman,BSE Brokers Forum,said,Investors nerves remained frayed with NSEL defaulting for the fourth time on the revised settlement plan. There is little patience left for excuses… and seething anger on the repeated defaults.
NSEL has defaulted on the payment commitments for the fourth round of settlement
It could pay only Rs 7.77 crore to investors out of scheduled Rs 174.72 crore
In the previous three rounds,NSEL got only Rs 120 crore against receivables of Rs 524 crore,leaving a huge shortfall.