This Article is From Mar 18, 2015

NSEL Says Brokers Hiding Client Details

Mumbai: The crippled National Spot Exchange Ltd (NSEL) on Wednesday accused the brokers of not providing investor details, and said going by the number of details it got so far the total number of investors who have claimed to have lost money looked bogus.

The exchange said so far it has received details of only 3,600 investors against 13,000 who claim to have lost around Rs 5,600 crore in the scam.

The exchange has been seeking investor details like KYC norms-related information and documentation proof of payment disbursement from its broker members.

NSEL joint managing director Prakash Chaturvedi also said "the exchange is fully responsible for paying all dues to our members but only as and when we get money".

The exchange, which was forced to down shutters from end-July 2013, also claimed that it has already paid Rs 179 crore to 200 brokers as a special payout to brokers to be paid back to investors. The exchange said it has till date received responses from only 133 brokers.

While these brokers account for 3,586 clients and Rs 92 crore of payout, the exchange has no information about the Rs 87 crore disbursement, it claimed.

"We are making every effort to establish genuineness of investors and expect cooperation from all. We have contractual relations with 156 trading clients and have sought KYC from our trading members to establish the real beneficiary of Rs 179 crore we had disbursed to 133 NSEL members. But, we have got details of only 3,586 clients," Mr Chaturvedi said.

He, however, refused to provide names of the brokers.

He also said it got the KYC details of only 1,938 trading clients as against 13,000. "This raises doubts. We will pass on the developments, if any, to the relevant authorities," Mr Chaturvedi added.

It may be recalled that various investor bodies including NSEL Investors Forum and NSEL Investors Action Group have been repeatedly claiming that the number of investors who lost at 13,000. This has been given to the Bombay High Court as well. Even this number was quoted by Forward Markets Commission as well.

The EOW looking into the scam has reportedly secured assets of 22 defaulters worth around Rs 5,000 crore, which needs to be liquidated and paid to trading clients. Defaulting members have admitted to liabilities of around Rs 2,000 crore through settlement agreements, he added.