The settlement of dues at the crisis-ridden National Spot Exchange Ltd (NSEL) is going to take as many as five months with 13 members and processors with dues of around Rs 3,107 crore offering to pay 5 per cent of their total dues every week.
“It can get delayed further if any of the investors go for legal steps. This is in unregulated market,” said a person familiar with the NSEL developments.
According to NSEL, eight members processors are willing to pay as per the scheduled due date or even earlier. The total amount involved in the case of these members is Rs 2,181 crore. “There are three processors with whom negotiation is still going on. The amount pertaining to these parties comes to Rs 311 crore,” NSEL said after a meeting with members and processors on Sunday.
Anjani Sinha, MD & CEO of NSEL, expressed confidence over handling large quantum of pay-in and payout obligation at the same time. However, in the case of declaration of default by any member, which would lead to a long litigation process, these options have been proposed and the final decision would be taken after due consultation with all stakeholders, he said.
The 13 members who have proposed to pay in installments include Juggernautes Projects Ltd, MSR Food Processing, PD Agro Processors Pvt Ltd, Shree Radhe Trading Pvt. Ltd, Sankhya Investments, Spin Cot Textiles Pvt Ltd, Swatik Overseas Corporation, Topworth Steels & Power Pvt Ltd, Vimladevi Agrotech Pvt Ltd, NK Corporation, NCS Sugar, Metkore Alloys & Industries and ARK Imports Pvt Ltd.
Another option available with the NSEL is encashing post-dated cheques. The exchange is in possession of post- dated cheques (PDC) from various processors amounting to Rs 4,900 crore against their settlement obligation and balance.
“While PDCs are a commitment, the payout process may not roll out smoothly in a month’s time. Hence, the market participants have proposed option 1 (mentioned above) as a safer alternative,” NSEL said.
Sinha said he held meetings which were aimed “at ensuring avoidance of any incidence, which may have consequential impact on larger market.” NSEL also held discussions with the Forward Markets Commission (FMC).
FMC officials had indicated on Saturday that “their hands are tied” and it has no power whatsoever to take action against the exchange. FMC will collect the information and pass it on to the Government which will take the final call, FMC officials said.