MPID court rules to pay NSEL small traders up to Rs 20 lakhs, excludes corporates

by IANS |

Mumbai, Oct 15 (IANS) In a big win for small traders, the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act (MPID) court has directed the Competent Authority to make a graded distribution only to about 2,040 individual traders who have outstanding amount between Rs 10 lakhs and Rs 20 lakhs.

However, on Thursday last, the MPID court excluded corporates and partnerships from getting preferential payment in the Rs 5,600 NSEL payment default crisis.

Now by this order, out of the total unverified 12,735 traders, as many as 72 per cent or 9,193 traders will be paid fully, NSEL said in a statement on Saturday.

NSEL, which has been fighting for the cause of genuine traders, supported this petition, while it was vehemently opposed by the NSEL Investors Action Group (NIAG) of Ketan Shah and argued by counsel Chirag Shah of the NSEL Aggrieved and Recovery Association (NAARA).

Earlier, NIAG had opposed and lost in the Supreme Court when it tried to sabotage the balance 50 per cent disbursal to 6,400 traders falling between Rs 2 lakhs and Rs 10 lakhs.

To give immediate relief to small traders in 2013, NSEL had paid 50 per cent to the same 6,400 traders and 100 per cent to 708 traders having outstanding below Rs 2 lakhs, it noted.

"Ketan Shah and Chirag Shah, who have been masquerading as messiahs, rank among 781 crorepatis with unverified claims of over Rs. 1 crore and have been fighting against the release of this available money to small traders. The only reason for opposing such payments could be that this would greatly undercut their power as champions of small traders," the NSEL added.

Instead of fighting for the recovery of the default amount from the defaulters, Chirag Shah and Ketan Shah have been fighting in favour of brokers and opposing payments to small traders, NSEL said, adding: "This order has unmasked their real face to people."

NSEL noted that all traders have signed a client-broker agreement with their brokers and are registered clients of the brokers.

No trader has privity with NSEL. The brokers had lured their clients with forward contract of one-day duration and by offering 80:20 and then 90:10 schemes.

"Brokers have indulged in irregularities such as largescale client code modification, false promises, KYC manipulation, and infusion of black money through benami transactions. Except for three brokers, even the Economic Offences Wing (EOW) has neither acted against nor filed any charge-sheet against brokers," it added.

Despite this fact, NSEL alleged, no action was taken by then Forward Market Commission Chairman Ramesh Abhishek against brokers and defaulters. Ramesh Abhishek only focused his targeted actions against NSEL and 63 moons, thereby, allowing the defaulters and brokers to go scot-free.

NSEL pointed out that all investigating agencies have confirmed the liability of the defaulters with the money trail up to the last paise traced to the defaulters. "No money trail is established to NSEL, its directors, or promoters. Despite continued attacks, NSEL is singlehandedly fighting for the recovery against the defaulters so that the genuine traders can be repaid at the earliest."

NSEL has solely extended support to investigative agencies and gone after defaulters, obtained decrees and awards worth Rs 4,300 crore. Against the unverified claims of Rs 4,800 crore, NSEL has actively worked and supported in getting over Rs 6,000 crore worth of defaulters' assets already attached by the EOW and ED, which is sufficient to cover genuine claims of the balance traders.

NSEL urged the EOW to support its genuine mission of recovery, instead of supporting NIAG and NAARA in their petition for opposing reliefs to small traders. "It is time for authorities to investigate and unmask real faces of such vested interests, blackmailer associations who trade pain for personal gains."

NSEL stated that it has full faith in the country's judicial system that the truth will get established. "With this MPID court order, justice and truth have prevailed again."

NSEL reiterated that the payment crisis was triggered by the abrupt halting of a running exchange by Ramesh Abhishek, the then FMC chairman on the instruction of then Finance Minister, P. Chidambaram, through his close aide and then Additional Secretary of Commodities and Capital Markets, KP Krishnan.

In an Rs 10,000 crore damage suit filed by 63 moons against the three individually, the Bombay High Court has already issued a notice.

Latest News
Kerala village to host unique camp of artists Sat, Dec 02, 2023, 04:25 PM
Unbeaten FC Goa take on in-form Kerala Blasters in top-of-the-table clash Sat, Dec 02, 2023, 04:18 PM
Microsoft announces general availability of 'Copilot' Sat, Dec 02, 2023, 04:16 PM
Don't make report public until tabled in Parliament: Trinamool on ethics panel's report on Mahua Sat, Dec 02, 2023, 04:05 PM
Manipuri man, family beaten by unknown assailants in Delhi; police launches manhunt Sat, Dec 02, 2023, 04:04 PM
5 homeless persons shot in Las Vegas, 1 dead Sat, Dec 02, 2023, 03:49 PM
December 3 will bring both sorrow and joy for people of Bhopal Sat, Dec 02, 2023, 03:39 PM
Telangana Congress alleges diversion of Rythu Bandhu funds Sat, Dec 02, 2023, 03:39 PM
Amit Shah pays tribute to Divyakant Nanavati's legacy in Gujarat Sat, Dec 02, 2023, 03:11 PM
Man fatally struck by vehicle in east Delhi Sat, Dec 02, 2023, 03:09 PM
Amid violent protests, Bangla polls may further deepen political fault lines Sat, Dec 02, 2023, 02:57 PM
Resumption of Israeli attacks halts humanitarian supplies into Gaza Sat, Dec 02, 2023, 02:52 PM
Fast changes in dopamine levels may determine human behaviour: Study Sat, Dec 02, 2023, 02:51 PM
New immunotherapy strategy hope for psoriasis and vitiligo patients Sat, Dec 02, 2023, 02:45 PM
Minus Imran Khan: Lawyer Gohar Ali Khan becomes PTI chairman Sat, Dec 02, 2023, 02:45 PM