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National Spot Exchange declares 9 members as 'defaulters'

National Spot Exchange declares 9 members as 'defaulters'

National Spot Exchange (NSEL) has declared nine members (buyers) who failed to pay their dues on the first day of settlement on August 20 as 'defaulters'.

Following directives from the commodity market regulator, National Spot Exchange (NSEL) on Friday declared nine members (buyers) who failed to pay their dues on the first day of settlement on August 20 as 'defaulters'.

NSEL, promoted by Jignesh Shah-led Financial Technologies, is facing the problem of settling Rs 5,500 crore dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on the government direction.

The spot exchange announced a seven month plan to settle these dues. However, NSEL was able to pay only Rs 92 crore on August 20, the first day for pay-out to investors, of the scheduled Rs 174.72 crore.

"Following Members have been declared as Defaulters as per the rules of the exchange - (a) ARK Imports Pvt Ltd (b) Loil Overseas Foods Ltd (c) Lotus Refineries Pvt Ltd (d) N K Proteins Ltd (e) NCS Sugars Ltd (f) Spin Cot Textiles Pvt Ltd (g) Tavishi Enterprises Pvt Ltd (h) Vimladevi Agrotech Ltd (i) Yathuri Associates," NSEL said in a circular.

After it was informed by NSEL of these nine members (buyers) who did not pay their instalments, regulator Forward Markets Commission (FMC) directed NSEL to declare them as 'defaulters' and liquidate all their realisable assets.

The regulator also asked NSEL to auction defaulters' commodities lying in the accredited warehouses as collateral.

The proceeds of commodities auctioned and realisation of assets of defaulter should be deposited in escrow account and should be paid to selling members with the approval of the Commission, FMC had directed.

Meanwhile, Income Tax department on Thursday conducted searches on the business premises of two dozen members of the NSEL, which is facing alleged irregularity charges in settling Rs 5,500 crore dues to investors.

With inputs from PTI

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Published on: Aug 23, 2013, 4:27 PM IST
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