Who are the NSEL Defaulters?

NSEL was set up to provide an electronic platform to farmers and others for spot market trading in agriculture and other commodities, but it later emerged that some short- duration forward contracts were also being traded there. The NSEL crisis refers to 24 counterparties having defaulted in paying over Rs 5,500 crore to over 13,000 investors after it was discovered in July 2013 that the collateral against which they raised the funds was virtually non-existent. 

National Spot Exchange Limited (NSEL) has been actively pursuing recovery of outstanding dues from the 24 members. Out of which two members with a total liability of Rs.196 crore have almost cleared their dues.

NSEL has now declared 22 members as ‘Defaulters’ on 22nd and 28th August 2013 and 22nd October 2013 as per Rule 41 of the Exchange Bye laws. The total outstanding amount from these defaulters’ as on November 28, 2014 stood at Rs. 5323.66 crore exclusive of interest payable, post closure of exchange trading on July 31, 2013. So far, as per media reports, defaulters’ properties worth around Rs. 5,000 crore have been attached by the Economic Offences Wing (EOW) of Mumbai Police. Due to this, in the year 2013, stock exchanges have decided to bar defaulters, who caused the Rs 5,500-crore payment crisis at NSEL, from all trading activities as per direction from markets regulator SEBI in the latest crackdown against such entities.

The Bombay High Court has set up a special Committee under Retd. High Court Judge Honorable VC Daga to monitor and ensure quick disposal of these assets owned by the Defaulters. The Govt. of India, Ministry of Corporate Affairs has also intervened and is working to resolve the crisis at the earliest. More than 13,000 traders/investors are said to have been affected  due to the crisis. The crisis has also dented the business empire created by entrepreneur Jignesh Shah i.e. FTIL, a leading technology player in the financial markets. A quick resolution should bring much needed cheer to important and affected stakeholders related to the crisis as well as set an example for financial criminals such as these 24 defaulters of the Exchange. 

DEFAULTERS	OUTSTANDING AMOUNT
Mohan India	878.39 Crore
NK Proteins Pvt Ltd	938.24 Crore
ARK Imports Pvt Ltd	719.37 Crore
Loil Health Foods Ltd (Promoter Co. Lakshmi Energy & Foods Limited)	720.34 Crore
P.D.Agroprocessors (P) Ltd	674.09 Crore
Lotus Refineries	252.48 Crore
Metkore Alloys & Industries Ltd	95.08 Crore
White Water Foods Pvt Ltd	84.82 Crore
NCS Sugars Limited	51.70 Crore
Shree Radhey Trading Corporation Private Limited	34.59 Crore
Spin Cot Textiles Pvt Ltd	38.26 Crore
Vimladevi Agro Tech Ltd	13.94 Crore
MSR Food Processing	8.82 Crore
Yathuri Associates	403.60 Crore
Aastha Minmet India Pvt Ltd	242.16 Crore
Namdhari Rice & General Mills	61.41  Crore
Swastik Overseas Corporation	93.14 Crore