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More NSEL: Just 85 Lakh in Settlement Guarantee Fund

In FinTech’s annual report, note that NSEL’s settlement guarantee fund was close to non-existent in comparison with the 800 cr. , 60 cr. and even 5 cr. numbers bandied about. (HT Mahesh, @mbp25)

37. (a) In a Group Company viz. NSEL, various State Agriculture Produce Market Committee’s (APMC’s) while issuing license for establishing E-market / Private market / spot exchange, had laid down to maintain a Settlement Guarantee Fund (‘SGF’) to meet exchange obligations but  have not given any guidelines for the constitution of the SGF. In view of such a requirement an amount of Rs. 64.66 lacs had been apportioned out of initial margins of the members to SGF A/C and shown under other current liabilities (Refer Note 11) in the financial year 2011-12. In the current year the said amount has been transferred back to initial margins from members account and an appropriation of
an equal amount has been done out of opening balance of Reserves and Surplus of the company. The company has appropriated for Security Guarantee Fund (SGF) an additional amount of Rs.20 lacs for the current financial year 2012-13.

So at best, NSEL had just Rs. 85 lakh as the Settlement Guarantee Fund? This is as of March 31, 2013, but it’s really strange that the guarantee fund has always been mentioned to have been much higher.

And it seems FMC now has a report out that NSEL has only 15% of reported stock.

Two shamefaced lies, both likely to amount to fraud. Not one arrest. Not one reprimand.

No one will cast the first stone. We remain a country of thieves.

  • Yusuf says:

    Solid reporting on NSEL. Well done, Deepak.

  • ritesh says:

    yes true, said, country of thieves .

  • Investor says:

    India is truely a country of thieves. Even after all the reports being submitted and facts known, there has not been a single arrest in this case. Jignesh Shah and all the frauds should have been booked by now. FinMin should have frozen assets of all NSEL members and borrowers. These frauds should be punished severely, but foremost all the money should be recovered and returned to the investors.
    All NSEL members and borrowers will go to hell. Cheats, fraudsters, thieves.
    They have taken people’s hard earned money. Investor is an investor, be it HNI or common man. Even HNIs have lost huge money, which may not keep them HNI any more. HNI money being involved is no excuse for inaction. It is a shame on India and the entire system that nothing is being done.