New Delhi: With the government ordering the merger of NSEL with FTIL, the parent firm might have to absorb huge liabilities including over Rs 5,200 crore payment dues to clean up the mess at the scam-hit bourse.
Pursuant to the merger, ordered by the Corporate Affairs Ministry in connection with over Rs 5,600-crore payment crisis at the spot exchange, Financial Technologies (India) Ltd would take over all the liabilities of National Spot Exchange Ltd including payments due to be paid to investors and others.
So far, the crisis-hit exchange has managed to recover only about Rs 360 crore dues from defaulters, a part of which has been disbursed and the rest is in an escrow account.
Following the NSEL fiasco that broke out in July 2013, the Jignesh Shah-led parent group and related entities have come under the scanner of multiple agencies. A charge sheet has been filed by Economic Offence Wing of Mumbai Police against Shah and others. Shah also had to spend some time behind the bars, but was granted bail later.
As per its website, NSEL has been actively pursuing recovery of outstanding dues from the 24 members with a total pay-in obligation of around Rs 5,600 crore.
Two members with a total liability of Rs 196 crore have almost cleared their dues, it said.
"So far, defaulters' properties worth around Rs 4,000 crore have been attached by the Economic Offences Wing (EOW) of Mumbai Police," according to the website.
In its draft order for the merger, the ministry said it is being done in "essential public interest".
According to the order, NSEL does not have the resources, financial or human, or the organisational capability to successfully recover the dues pending for over a year.
Further, NSEL is not left with any viable, sustainable business while FTIL has necessary resources to facilitate speedy recovery of dues, it noted.
"In the face of a fraud of such a magnitude involving settlement crises of Rs 5,600 crore owed to over 13,000 investors on the trading platforms of NSEL, FTIL cannot seek to take refuge behind the corporate so as to unjustifiably isolate itself from the fraudulent actions that took place at NSEL resulting in such a huge payment crisis," the order said.
