NSEL sacks CEO; pays only Rs 92 cr to investors

Forward Markets Commission writes to NSEL Board saying that payment default in first tranche casts "serious doubts" on credibility of the exchange

National Spot Exchange has sacked its entire top management, including CEO and MD Anjani Sinha, as the beleaguered bourse could manage to pay just over half of Rs 175 crore first tranche of payment due to investors. The Jignesh Shah-led Financial Technologies-promoted NSEL, which has been barred from offering trade in any commodity following irregularities, also sacked its CFO Shashidhar Kotian and five others with immediate effect. Questioning NSEL's credibility, Forward Markets Commission (FMC) wrote to NSEL Board saying, "non- settlement of outstanding trade on NSEL seriously reflects on your credibility and reputation, which is a key ingredient in meeting the criteria for 'fit and proper' person. "In the eventuality of you losing your status as a fit and proper person, you (NSEL Board) cannot continue to hold directorship or shareholding in any of the recognised futures commodity exchanges." "Your status as a 'fit and proper person' is at serious risk and may lead to consequential actions," it said adding that the Board should take complete responsibility for the completion of settlement of all outstanding trade at NSEL. NSEL has furnished "insufficient and delayed information to the Commission which is neither accurate nor reliable", it added As the exchange failed to pay up the committed amount of Rs 174.72 crore, NSEL Investors Fourm as well as brokers threatened to take legal remedy at the earliest. The board has also announced the appointment of PR Ramesh as an "officer on special duty" to exercise all powers of a CEO and will report to the board directly. The others who have been removed are Amit Mukherjee, Assistant Vice-president for business development; Jai Bhaukhundi, Assistant VP for market operations; Santosh Mansingh, and HB Mohanty, assistant VPs for market operations; and Maneesh Chandra Pandey, Business Development Manager. NSEL said 15 members (buyers) have made payment of Rs 92.12 crore on Tuesday while nine have defaulted. The defaulter members include Ark Imports Pvt Ltd, Loil Overseas Foods Ltd, Lotus Refineries Pvt Ltd, N K Proteins Ltd, NCS Sugars, Spin Cot Textiles, Tavishi Enterprises, Vimladevi Agrotech and Yathuri Associates, it said. Members of the NSEL have been directed to further disburse this amount in the same proportion to all clients against their unsettled obligations, the exchange added.