The National Spot Exchange Limited (NSEL) on Tuesday defaulted
on its planned payout, coughing up just R7.77 crore against the promised
R174.72 crore. In the first three rounds, NSEL had paid R92.13 crore,
R12.05 crore and R15.32 crore, respectively. Tuesday’s payments were
partly funded from the receipts of stocks liquidated in an auction. “So
far, R7.77 crore has been realised and the payout is being made out of
these proceeds. Auction of other stocks is in process,” an NSEL press
release said.
NSEL also acknowledged that the audit by Swiss certifying agency SGS has revealed significant stock shortages at nine warehouses relating to seven defaulters. It added that SGS was not allowed to enter 29 warehouses managed by 11 defaulters, and that it was yet to submit the verification report for two more warehouses.
Meanwhile, citing a verification report by Sharp & Tannan Associates, NSEL claimed that the liability of the 24 borrowers has been confirmed by the audit firm. The exchange thus refuted claims made by entities like Lotus Refineries, which said NSEL owed it money.
NSEL reiterated that it was actively pursuing recovery of outstanding dues from members with pay-in obligations. “This includes initiation of civil and criminal proceedings against defaulting members, besides action under the rules and byelaws of the exchange,” the release said.
So far, 19 members have been declared defaulters and legal proceedings initiated. “While 13 out of the 19 defaulters have met the exchange officials during the last two weeks, six are yet to meet the officials,” the release added.