New Delhi: Former chief executive officer (CEO) of National Spot Exchange Ltd (NSEL) Anjani Sinha has said that his boss and Financial Technologies (India) Ltd (FTIL) promoter Jignesh Shah would be apprised of day-to-day matters at NSEL.
After being granted bail on May 09, Sinha talked exclusively to Zee Business about the NSEL crisis.
Excerpts from the interview...
The NSEL, promoted by Jignesh Shah-headed Financial Technologies India Ltd (FTIL), was engulfed in a crisis after its suspended trade on July 31, raising concerns about possible default of Rs 5,600 crore due to investors, including 7,000 small investors.
Q. Consumer Affairs Ministry had issued a notice to NSEL in 2012 over payment crisis. There was an outstanding of Rs 22,000 crore which came down to Rs 5,600 crore.What are your views on that?
A. It is nothing like that. The figure was never Rs 22,000 crore. NSEL outstanding position was Rs 3000 crore in 2012.
Q. During several audits including that of the forensic auditor and FMC, it was found that there was inadequate or no stocks in the warehouses. The brokers had also cited similar instances. How was the business still working?
A. The entire issue was transparent. The buyers had the right to visit warehouses. In fact in the last 2-3 years buyers, investors and members had visited the warehouses and had also verified stocks. The NSEL had an agreement with the defaulting parties wherein it had to give delivery to the traders whenever they had opted selling position. NSEL had also given post-dated cheques and bank guarantees to the buyers.
Q. Did your parent company FTIL promoted by Jignesh Shah and board members including Shreekant Javalgekar, Joseph Massey know about the ongoing payment scam?
A. The business model was such that the top officials of FTIL had all the information. Regular audits of spot exchange, everyday turnout figures, informations regarding trading in spot exchange, daily outstanding figures were shared with all the officials of FTIL. But the investigative agencies are probing into the matter now. So it will be better that these agencies come out with a final report. I am confident that they will soon bring forth the correct findings.
Q. Did Jignesh Shah personally meet borrowers?
A. The defaulting members whom you are referring to as borrowers had personal meetings with Jignesh Shah. The meetings took place at FTIL and NSEL office. The entire documentation of the meeting is available.
Q. Which borrowers did Jignesh Shah meet? Did he meet with the biggest borrower NK Protein?
A. I can't particularly mention the details but he met with a lot of defaulting members. Enforcement Directorate and Economic offence wing findings are that he had met with the borrowers.
Translation/Compilation: Reema Sharma
