Brokers have rejected the company's proposal and questioned its modality on arriving at the package
In a bid to resolve part of the Rs 5,600 crore dues outstanding to investors in the ongoing National Spot Exchange Ltd (NSEL) scam case, parent firm Financial Technologies (FTIL) has come out with a settlement proposal to resolve the issue of its defunct subsidiary.
FTIL has proposed to pump in additional Rs 820 crore, with brokers contributing Rs 500 crore, taking the total bailout till date to Rs 1,000 crore. Meanwhile, brokers have refused the proposal and questioned FTIL's modalities of arriving at Rs 1,000 crore settlement package.
The structure envisages full settlement of Rs 164 crore for the 6,445 investors with dues ranging between Rs 2 lakh and Rs 10 lakh, and nearly 50% of the Rs 1,345 crore dues for the 4,901 investors falling in the Rs 10 lakh to around Rs 1 crore category.
For the remaining 781 HNIs with over Rs 1 crore dues totaling Rs 1,523 crore and the two PSUs amounting to Rs 320.80 crore, FTIL said it will be paid through liquidation of assets in custody over the next three or four months.
FTIL spokesperson said, "FTIL has received no dividend or bonus from NSEL. For all the services rendered to NSEL by FTIL, money has always been pumped in by FTIL. Neither FTIL nor its promoters or directors have benefited to even a single paisa from NSEL. Dividends declared by FTIL are on its own standing."
The proposal has been put up on the public domain and exchanges and also communicated to the ministry of consumer affairs. However, the proposal is yet to be accepted by the aggrieved parties comprising, small individual investors, high-networth individuals and two government-owned companies.
It may be recalled in July 2013, the NSEL fraud came to light due to payment defaults of pair contracts totalling Rs 5,600 crore. The arbitrage opportunity led to a series of omission where NSEL neither had the money nor the commodities on the settlement dates. About 13,000 investors were claimants to the loss amounting to Rs 5,600 crore.
The outstanding is currently Rs 5,300 crore after some recovery where FTIL paid Rs 180 crore by way of a bridge loans to NSEL. The amount settled all the outstanding of small investors with outstandings between Rs 2 and Rs 5 lakh and 50% of the outstandings between the Rs 5 and Rs 10 lakh category of investors.
The new proposal, if accepted by all parties, namely, brokers, trading clients government and others will be shared by NSEL, brokers and a few trading clients.
Meanwhile, stocks of FTIL gained over 13% on the BSE as well as NSE. It ended at Rs 191.75, gaining 13.19% on the BSE.
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