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Dear Esteemed Stakeholders and Readers,Welcome to the fourth issue of our newsletter - NSEL NEWS. We believe that it is our prime duty to keep you updated on the progress of recovery and ongoing litigation against the defaulters and the relentless efforts put by our recovery and legal team in this regard. We continue with our journey with full commitment towards making recovery from the defaulters by following the due course of law.
On 29th April 2016, Shri Arun Jaitley, Union Minister of Finance and Corporate Affairs, said in a written reply to Lok Sabha question “The Centre has directed market regulator SEBI to "examine" and "take necessary action" against defaulting brokers in the Rs. 5,574 crore NSEL scam. Also, the Special Team of Secretaries at their regular review meeting highlighted the SEBI action on brokers and asked to expedite the necessary action under law.
As per news reports, a Delhi-based businessman Vishvanidhi Dalmia, has filed a recovery suit in the Bombay High Court against his brokerage firm India Infoline Ltd and its four officials including Chairman Nirmal Jain. We shall not be surprised if more such complaints and actions are taken by the trading clients against their brokers in the coming days, in view of the large scale alleged malpractices indulged into by the brokers.
We urge all of you to join the sustained battle against the defaulters. With your cooperation and assistance, NSEL will be able to devise an effective strategy for speedy recovery from the defaulters. We once again urge the victims not to allow themselves to be used by the unholy designs and vested interests who are running a covert agenda of demolishing NSEL and its promoter.
NSEL NEWS is a platform for all of us to stay connected with regular updates and for a joint action against defaulters for recovery.
We would be eager to have your feedback and suggestions about the newsletter. Do write to us on [email protected]
Best Regards
Prakash Chaturvedi Chief Executive OfficerNational Spot Exchange Ltd. (NSEL)
Followed by the Hon’ble High Court Committee which had recommended audit of leading brokerage firms in its interim report no. 7, SEBI has also initiated much awaited action on brokers by appointing auditors for audit of five brokerage houses with respect to a slew of complaints received against them from their trading clients.
ISSUE04
MAY
-JU
NE
2016
The Newsletter of National Spot Exchange Limited (NSEL)
NSEL NEWSFrom the CEO’s Desk
For private circulation only
INFOCUSRECOVERY UPDATE
SNAPSHOT - RECOVERY
SNAPSHOT - LITIGATIONS
DEFAULTERS WHO HAVE TO RETURN MONEY
NEWS HIGHLIGHTS
Page - 02-03
Page - 04
Page - 05
Page - 06
Page - 07
If you have any information about
Write to us on
DEFAULTERS (Their whereabouts, New Business Ventures, Financial Dealings...)
SHARE WITH US!
C O N T E N T S
INFOCUS RECOVERY UPDATE
www.nationalspotexchange.comPage02 NSEL NEWS | May-June 2016
THE NSEL RECOVERY UPDATE
RECOVERY ACTIONS AGAINST DEFAULTERS
• NSEL has already secured recoveries amounting to Rs. 1233.02 Crore by way of decree on admission against 5 defaulters and through injunctions from a total of 18 defaulters with outstanding of Rs. 4515.93 Crore.
• The Economic Offences Wing (EOW), Mumbai Police has attached assets worth around Rs. 5000 Crore of defaulting trading members.
• The Enforcement Directorate (ED) has attached assets worth around Rs. 800 Crore of the defaulting trading members.
• It is pertinent to note that out of 24 defaulting trading members 2 trading members with original outstanding of Rs. 195.75 Crore have almost cleared their dues.
• NSEL has disbursed amount of Rs. 542.99 Crore to trading brokers, which includes a without prejudice loan from Financial Technologies India Limited (FTIL) to be paid to the smaller trading clients.
• NSEL has settled the e-Series contracts outstanding upto 98.48 % by disbursing Rs. 298.52 Crore to the approx. 40000 e-Series unit holders directly to their bank accounts.
• NSEL has additionally recovered Rs 34.98 Crore as available in its escrow account/ Competent Authority/ Court for distribution after order from High Court Committee (HCC).
• There is an additional amount of Rs.10 Crores paid by N K Proteins in the MPID Court as security for granting bail to Mr. Nimish Patel. NSEL has made an application in MPID Court to transfer this amount to NSEL escrow account.
• So total amount available for distribution is Rs. 44.98 Crore and would be disbursed to the genuine trading clients after relevant orders.
Mohan India: The Hon’ble Special MPID Court had directed the sale of properties of Mohan India Group namely Delhi Civil Lines and Bikaner Land. The Court has appointed Knight Frank India as a global consultant to bring in quality buyers. As per MPID directions Competent Authority has republished the sale notice on 8th June 2016 with certain modified terms and conditions.
Aastha Alloys: The Hon’ble Bombay High Court on 03/02/16 has directed the defaulter Aastha Group to deposit Rs. 157.50 Crore subject to any already deposited amount, within four weeks against their admission of liability. The appeal filed by Aastha Group against the Order of decree on admission passed by the Single Judge was dismissed by the Hon’ble Bombay High Court. Also the Hon’ble Special MPID Court has directed the Competent Authority for sale of shares in Mohit Agarwal and Shilpa Agarwal’s Demat accounts of Aastha Group.
Swastik Overseas: The Hon’ble Special MPID Court had ordered the Competent Authority to begin the auction procedure for residential & commercial properties of Swastik Overseas Corporation in Ahmedabad. Accordingly, the Competent Authority has issued a public notice for sale of the properties of Swastik Overseas Corporation on 8th June 2016. Also Bharat Bio Gas (debtor of Swastik Overseas) has given proposal to repay Rs 1.89 Crs in High Court Committee.
ARK Imports: The Hon’ble MPID Court has directed the Competent Authority to fetch the valuation and proceed with sale of ARK Import’s 11 properties.
Based on relentless single-handed recovery efforts by NSEL from the defaulters:
Violation of bail condition by defaulters as on 31.05.16
Rajesh MehtaSwatik Overseas Gagan SuriYathuri AssociatesShilpa AgarwalAastha Minmet
Nageshwara RaoNCS SugarsRanjeev AgarwalPrimezone / PD Agroprocessor
75 crs
271 crs
11 crs
11 crs
36 lacs
2.64 crs
6 crs
1.02 crs* +0.49 crs
TMT auction**1.51 crs2.80 crs24 lacs
72.36 crs
265 crs
9.49 crs
8.20 crs
12 lacs
Cancellation of Bail Application is pending in MPID Court.Cancellation of Bail Application is pending in MPID Court.Cancellation of Bail Application is pending in MPID Court.
Cancellation of Bail Application is pending in MPID Court.Cancellation of Bail Application is pending in MPID Court.
09-07-14
10-11-14
12-08-14
11-09-14
10-11-14
Defaulter
Amount payable as per bail condition
Amountpaid till30.05.16
Shortfall in bail
condition RemarksBail order
date
* Paid by: Aastha 0.75 crs; Debtors- Shree Venkateshwara Rs 6,32,407, Bagalkot Cement Rs 9,00,699, Rayen Steel Rs 12,00,000** TMT auction amount is with CA
INFOCUS RECOVERY UPDATE
Shree Radhey Trading: Ramesh Nagpal of Shree Radhey Trading has been arrested by EOW and was granted bail by MPID Court on the conditions of him making FDR of Rs. 29 Lakh in Competent Authority's account within 10 days, and depositing Rs. 25 Lakh every quarterly in Competent Authority’s account. Further the Hon’ble Special MPID Court has ordered the Competent Authority to begin the auction procedure for red chilly and black pepper of Shree Radhey Trading in Saharanpur. Accordingly, the Competent Authority has issued a public notice for sale of red chilly and black pepper of Shree Radhey Trading.
Metkore Alloys and Industries: The Hon’ble Special MPID Court has ordered the Competent Authority to begin the auction procedure for ferrochrome of Metkore Alloys and Industries in Tekkali. As per directions from the Hon’ble Special MPID Court, the Competent Authority has issued a public notice for sale of ferrochrome. Further, -the Hon’ble Special MPID Court has directed the SBI to proceed with the sale of the properties of Metkore Alloys which were pending for sale, only after complete intimation to the Competent Authority. The sale proceeds were directed to be deposited in a no lien interest bearing A/c with intimation of the auction and sale proceeds and action of the SBI in respect of the same to the Competent Authority.
Yathuri Associates: The Hob’ble HCC has recommended that the Competent Authority to sell approx. 863 bags of sugar of Yathuri Associates. By Order dated March 10, 2016, Hon’ble Bombay High Court has accepted the recommendation of the Hon’ble HCC.
NCS Sugars: The Hon’ble Special MPID Court has ordered the Competent Authority to begin the auction procedure for the residential & commercial properties of NCS Sugars Pvt. Ltd.
Lotus Refineries: As per MPID Court directions Competent Authority has transferred Rs 16.10 crs from the attached bank accounts of Lotus Refineries to the Competent Authorities bank account
Bank Account of Defaulters: Hon’ble Special MPID Court has directed the Competent Authority to transfer the amounts from the attached bank accounts of the following defaulters to the Competent Authority’s Bank account - Aastha Minmet, Juggernaut Projects, Yathuri Associates, Metkore Alloys, MSR Foods, ARK Imports, Shree Radhey Trading, Swastik Overseas, Mohan India, Tavishi Enterprises, NCS Sugars, and Lotus Refineries
NSEL NEWS | May-June 2016www.nationalspotexchange.comPage03
12
3
4
5
6
78
910
1112
13
14
151617
Sr. No.
Dunar Foods Limited GroupNaraingarh Sugar GroupAastha Group
Namdhari Group
N.K. Industries GroupMohan India GroupLakshmi Energy & Foods Group
Group
ARK IMPORTS PVT LTDP D AGROPROCESSORS PVT LTD
YATHURI ASSOCIATES
JUGGERNAUT PROJECTS LTD.AASTHA MINMET INDIA PVT LTDMETKORE ALLOYS & INDUSRIES LTD.SWASTIK OVERSEAS CORPORATIONWHITE WATER FOODS PVT LTDNAMDHARI FOOD INTERNATIONAL PVT LTDNAMDHARI RICE & GENERAL MILLSSHREE RADHEY TRADING COVIMLADEVI AGROTECH LIMITEDMSR FOOD PROCESSINGN K PROTEINS LTD
MOHAN INDIA PVT LTDTAVISHI ENTERPRISES PVT. LTD.LOIL CONTINENTAL FOOD LTDLOIL HEALTH FOODS LTDLOIL OVERSEAS FOODS LTDLOTUS REFINERIES PVT LTDNCS SUGARS LIMITEDSPIN COT TEXTILES PVT LTDTotal
Name of defaulter
719.42687.30
424.64
220.2026.47
114.28
102.98
86.1253.07
10.75
35.3414.02
10.05969.89
600.08333.01356.21294.48
86.19252.56
58.8538.26
5494.19
0.0513.21
19.04
1.003.52
19.20
9.84
1.302.05
0.36
0.750.08
1.2331.59
54.700.008.507.001.080.086.650.00
363.71*
719.20673.85
399.60
219.2022.43
94.83
90.80
84.8251.02
10.39
34.4813.94
8.82934.45
545.38333.01347.71287.48
85.11252.48
50.9036.63
5296.54#
638.791187.77
418.56
167.73
102.44
41.31
163.0023.00
30.5021.81
8.00771.95
602.32
746.63115.62168.75
89.015297.19
54.76
95.11
48.89
-
1.67
42.4623.65
-
- -
-313.82
183.30
- - -
17.99 -
83.72865.37
##0.570.24
6.00
0.001.01***
0.25
2.34
0.001.48**
0.00
0.110.00
0.103.85
0.000.000.000.000.00
16.10**1.301.63
34.98
Original Outstanding
Amt Recovered &
Disbursed
Amt Outstanding
Assets Attached /
Secured by EOW
Assets Attached by
ED
Arrests made by
EOW
Amt Recovered in Escrow Account /
CA / Court
* This includes, Rs. 182.48 Crore which was received as settlement amount from two members who cleared their liability. In addition, Rs.179.27 Crore was paid by NSEL to its members towards remittances to the smaller Trading Clients by taking a without prejudice loan from FTIL.
** The amount is with Competent Authority
*** Out of this amount, Rs 0.52 Crore is in Escrow Account and Rs 0.49 Crore is with the CA
## Out of this amount, Rs 0.17 Crore is in Escrow Account and Rs 0.40 Crore is with the CA
# Amount deposited in CA is not deducted in the total liabilities of the member
Amount in Rs. Crore
The readers may note that it has come to our notice, that there have been dealings made by some trading clients directly with some of their known defaulters by way of agreements not disclosed to any of the regulators or to the exchange or to the HCC. Some of the recipients of the recovery amount are directly related to the leading luminaries championing the cause of trading clients.
SNAPSHOT-RECOVERY
www.nationalspotexchange.comPage04 NSEL NEWS | May-June 2016
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
Sr. No.
Dunar Foods Ltd. GroupNaraingarh Sugar GroupAastha Group
Namdhari Group
N.K. Industries Group
Mohan India Group
Lakshmi Energy & Foods Group
Group
ARK IMPORTS PVT LTD
P D AGROPROCESSORS PVT LTD
YATHURI ASSOCIATES
JUGGERNAUT PROJECTS LTD.
AASTHA MINMET INDIA PVT LTD
METKORE ALLOYS & INDUSRIES LTD.
SWASTIK OVERSEAS CORPORATION
WHITE WATER FOODS PVT LTD
NAMDHARI FOOD INTERNATIONAL PVT LTD
NAMDHARI RICE & GENERAL MILLS
SHREE RADHEY TRADING CO
VIMLADEVI AGROTECH LIMITED
MSR FOOD PROCESSING
N K PROTEINS LTD
MOHAN INDIA PVT LTD
TAVISHI ENTERPRISES PVT. LTD.
LOIL CONTINENTAL FOOD LTD
LOIL HEALTH FOODS LTD
LOIL OVERSEAS FOODS LTD
LOTUS REFINERIES PVT LTD
NCS SUGARS LIMITED
SPIN COT TEXTILES PVT LTD
Total
Name of defaulter
719.42
680.23
405.6
219.2
23
94.83
93.44
86.12
53.07
10.75
34.59
14.02
8.82
937.89
1,037.84
58.85
38.26
4515.93
719.4
-
265
145
12.5
-
91.2
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1233.02
138 MPID BHC Outside Bombay
Remark Injuction obtained
Decree Obtained
HCC
Amount in Rs. Crore
As per MPID order dated 02.04.2016 inspection and auction of raw wool at Seerah and Purba godown was conducted and sold to the highest bidder for a sum of 40 lakhsMA filed seeking direction to the bank for deposit of amount paid for loan repayment by PD AgroprocessorsMA filed to seek attachment of the pending properties (14 immovable properties and 3 vehicles).MPID court has directed CA for sale of shares in Mohit and Shilpa Aggarwal's Demat Accounts.MA filed for transferring the amounts in the Bank accounts Aastha to NSEL Escrow A/c and for sale of properties.As per direction of MPID Court SBI through its letter, informed CA that they have completed sale of two properties. The sale proceeds to be deposited in a no lien interest bearing A/c.MA filed in MPID Court seeking direction to accept the offer received for purchase of two residential properties of Swastik GroupAttached 2 bank accounts made absolute vide MPID order dated 04.03.2016. CA to maintain the amount in FDR with auto-renewal.Vide HC Order dated 10.03.2016, CA to transfer Rs. 47,47,500/- from sale of paddy stock from CA's Account to NSEL Escrow Account.MA filed to direct the CA to initiate the auction sale procedureAttached 3 bank accounts made absolute vide MPID Order dated 04.03.2016. CA to maintain the amount in FDR with auto-renewal.MA filed to direct the CA to initiate the auction sale procedureMA filed seeking sale of properties offered by Ravindra Reddy on behalf of Sampat Rao towards part payment of the liabilityMA filed seeking transfer of 10 Cr from registry of sessions court to NSEL Escrow Account. CA has reissued the auction sale notice for Mohan India’s Delhi & Bikaner properties and bids are invited till 12.08.16.MPID court directed CA to place boards at Mohan Group's properties. CA issued letter to NSEL to place the boards.MA filed in MPID Court seeking attachment of pending properties of the LOIL Group of Companies.MA filed in MPID Court seeking attachment of pending properties of the LOIL Group of Companies.MA filed in MPID Court seeking attachment of pending properties of the LOIL Group of Companies.16 crores from the attached bank accounts has been transferred to CA's account on 12.05.2016 and placed in FDR, as per MPID Court direction.Attached 2 Bank accounts made absolute vide MPID Order dated 04.03.2016. CA to maintain the amount in FDR with auto-renewal.Arbitration proceeding is initiated. Statement of Claim filed by NSEL.
SNAPSHOT-LITIGATIONS
www.nationalspotexchange.comPage05NSEL NEWS | May-June 2016
DETAILS OF LITIGATIONS
High Court Proceedings
Injunction was granted in favour of NSEL for a sum of Rs. 405.60 crores vide Order dated 01.10.2014 and a decree was granted in favour of NSEL vide order dated 18.12.2014 for an amount of Rs. 264.96 crores. Report No. 1 of the High Court Committee was accepted wherein related parties / sister concerns of Yathuri Associates was directed to deposit the amounts. Mr. Sanjeev Bhasin was directed to appear before the High Court Committee and provide the required documents and addresses of 23 related companies mentioned in the said Report.
High Court Committee Proceedings
863 bags of sugar are lying in the warehouse of Yathuri. However HCC had directed Competent Authority to conduct the auction sale of Sugar Stock.
MPID Proceedings
NSEL has filed MA bearing No. 194 of 2016 in MPID Court seeking attachment of the pending properties (14 immovable properties and 3 vehicles) of Yathuri Associates.
Properties for Attachment
A total of 26 properties belonging to Yathuri Group have been identified, and attached.
YATHURI ASSOCIATES
Gagan Suri
DEFAULTER OVERVIEW
DEFAULTERS WHO HAVE TO RETURN MONEY
www.nationalspotexchange.comPage06 NSEL NEWS | May-June 2016
Yathuri Associates is in the sugar business and closely related to Naraingarh Sugar Mills at Haryana. Member had commenced trading in Sugar Ex Ambala, Haryana. To develop the sugar business further in terms of processing by products such as molasses, bagasse member had planned to set up a new distillery unit with a bottling plant for alcoholic beverages. They have also tied up with an international brand as a franchisee to bottle their products.
Received till 20/06/2016
Rs. 25.04 Cr
Balance Receivable
Rs. 399.60 Cr
Original Outstanding
Rs. 424.64 Cr
29 April, 2016 - Business Standard 10 May, 2016 - Business Standard
Sebi has been asked to take necessary action against the defaulting brokers in the nearly Rs 5,600-crore NSEL scam A Delhi-based businessman Vishvanidhi Dalmia has filed a while the Corporate Affairs Ministry and other agencies recovery suit on Friday in the Bombay High Court against including the Enforcement Directorate are also brokerage India Infoline Ltd and its four officials including investigating the case, the government said today. chairman Nirmal Jain following delay in recovery of money
invested in scam hit National Spot Exchange Ltd (NSEL). Union Minister Arun Jaitley today told Lok Sabha that other than Corporate Affairs Ministry, the Economic With a business interest in real estate, exports of garments Offences Wing (EOW) of Mumbai police and the and investment in securities markets instruments, Dalmia Directorate of Enforcement (ED) are also investigating the has filed the suit for recovery of Rs 11.38 crore including matter. "Properties valued at Rs 5,757 crore an actual investment sum of Rs 7.60 crore and interest at (approximately) of the accused have been attached by 18 per cent to the tune of Rs 3.78 crore.EOW while 32 common properties valued at Rs 740 crore (by ED) and Rs 1,222.89 crore (by EOW) have been attached.
"Further, directions have also been given to the Securities and Exchange Board of India to examine and take necessary action against the defaulting brokers," he said in a written reply.
17 June, 2016 - Business Standard
Attacking sharply on former finance minister of the United Progessive Alliance government P Chidambaram and his son Karti Chidambaram, the Bharatiya Janata Party's Rajya Sabha MP Subramanian Swamy said that the father and son duo are masterminds behind scam at National Spot Exchange (NSEL). NSEL had faced an Rs 5,600 crore payment crisis in July 2013 which led to its promoter Financial Techologies (India) exit the exchange business.
Sebi to act against defaulting brokers in NSEL scam NSEL scam: an investor files recovery suit against India Infoline
Chidambaram mastermind behind NSEL scam
7 June, 2016 - Business Standard
The Securities and Exchange Board of India (Sebi) has recommended a forensic audit of brokerage houses whose clients’ significant amounts of money in the Rs. 5,574 crore National Spot Exchange Ltd. (NSEL) scam. The regulator has indicated this to third-party auditors looking
6, May, 2016 - Business Standard at the books of these brokers. Sebi had on April 4 given these brokerages 60 days’ time to have their books vetted by third-party auditors. The brokerages include Anand Rathi Commodities, India Infoline Commodities, Geofin The Maharashtra Protection of Interest of Depositors Comtrade, Phillip Commodities and Motilal Oswal (MPID) court has ordered transfer of Rs 12.74 crore from Commodities. 27 bank accounts of Lotus Refineries Pvt Ltd. The court
has directed the Economic Offences Wing (EOW) of the NSEL spokesperson commented saying that “We are Mumbai Police to ensure the transfer of funds efficiently. happy that Sebi has finally initiated an audit against Having defaulted for the amount of Rs 252.48 crore, Arun brokers, which was not done by former Forward Markets Kumar Sharma, director of Lotus Refineries was arrested Commission Chairman Ramesh Abhishek, despite having on November 11, 2013 and was released on bail after wide powers. In fact, the Economic Offences Wing could three months. major crime by brokers”.
This year on March 4, MPID court had also attached 37 properties of ARK Imports Pvt. Ltd. and has directed the competent authority to fetch the market valuation of the property and file draft sale proposal. Also, the court rejected the application of Nimish Patel, chairman of N K Proteins Ltd, NSEL's largest defaulter of Rs 934.45 crore seeking his travel to the United States between May 3 and June 21. Patel's application was rejected on the suspicion raised by investigating agency of potential absconding of the defaulter.
Brokerages face sebi fire in nsel scam
NSEL Scam: MPID court orders fund transfer from Lotus Refineries' account
www.nationalspotexchange.comPage07
NEWS HIGHLIGHTS
NSEL NEWS | May-June 2016
National Spot Exchange LimitedRegd. Off.: 601, Chintamani Plaza, 6th floor, Chakala, Andheri Kurla Road, Andheri (East), Mumbai - 400099.
Tel: +91-22-6761 9900 | Fax: +91-22-6761 9931 | www.nationalspotexchange.com
Disclaimer: The purpose of this newsletter is to provide current status to all stakeholders. The contents of the newsletter do not necessarily reflect the views or policies of NSEL and therefore, NSEL is not responsible for and specifically disclaims any liability arising out of damages of any kind arising out of the use or reliance on this information. Links or reference to other websites if any does not constitute endorsement of the material on those sites or any association with the same.
You are requested to send your email Ids with contact number along with your Client code, Member Id
for receiving regular updates on Recovery at email: [email protected]
Suggestions / feedback on the NSEL recovery efforts to
be mailed to us at email:
Trading Clients are requested to beware of bogus twitter handles that have strategized to derail the
recovery process by shifting attention away from defaulters and attacking the investigative agencies.
Beware!!! NSEL Trading Clients NSEL requests you to beware of some of the miscreants who have entered
into backdoor arrangements with defaulters to settle their own amounts, which had to be deposited in the escrow account for distribution to all. This action was a violation of the High Court order.
If you are aware of any such trading clients who have entered into similar malicious deals with the defaulters or planning the same, please bring it to our notice at email: [email protected]
