NSEL Welcomes HC Order On Payback, Blames Big Brokers For Delay

63 Moons, the erstwhile promoter of the shuttered commodities spot exchange NSEL, has welcomed the Bombay High Court order asking the state to pay back small depositors/investors who lost money in the exchange scam and squarely blamed big brokers associations for the long delay.

Citing the provisions of Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act that seeks to protect the middle-class and poor depositors, a division bench of justices SS Shinde and Manish Pitale earlier in the day asked Maharashtra to distribute the funds procured from attached assets to small investors whose outstanding dues were between Rs 2 lakh and Rs 10 lakh.

The court order came on an appeal filed by Maharashtra and a Pune-based NSEL claimant Rabibai Mohamad Ismail challenging the two orders of the MPIDA Court in October and November 2020.

Welcoming the order, 63 Moons said that from day-one, NSEL has been in support of this distribution to small claimants.

Over Rs 250 crore are lying in the escrow account which, if distributed among small claimants, would clear the outstanding of around 6,445 claimants, it said.

It also claimed that NSEL, with the help of 63 Moons has been striving to recover the default amount from 22 defaulters, which led to decree of Rs 3,365 crore and crystallization of liability by the High Court committee worth over Rs 900 crore, which is pending confirmation by the HC, and an injunction of Rs 4,515 crore.

The government had between 2014 and 2o15 distributed dues of 608 investors with underf Rs 2 lakh dues and 50 per cent of the outstanding amounts of 6,445 investors, whose dues were over Rs 2 lakh but under Rs 10 lakh.

With regard to the 5862 investors with over Rs 10 lakh claims, about 6.5 per cent of the outstanding amounts were paid.

In 2018, the government sought the court's permission to distribute the remaining available funds to the remaining 50 per cent of those investors whose outstanding amounts were between Rs 2 lakh and Rs 10 lakh. This request was, however, turned down by the lower court which said the funds shall be equally distributed among all the investors/depositors. Following this, Rs 35 crore were distributed equally among the 12,127 investors/depositors.

Thereafter, Rs 40 crore were made available for distribution among investors following which government filed an application before the lower court seeking that priority be given to the small investors first. 

(PTI)