Mumbai, Sep 15 (): Investors numbering seven lakh who put money in the e-series of the National Spot Exchange Ltd (NSEL) have been left high and dry.
The market regulator is only looking after the 13,000 investors who traded in the exchange contracts. e-series investors could buy platinum, gold and silver in electronic form at prices available and later can either sell them at prevailing prices and get paid in cash or take possession. NSEL holds the quantity in their warehouse.
Investors who applied to redeem the metals has in the past one month have not got in physical form and cash either. After the investors in NSEL faced problem, the e-series contract trading was stopped by the regulator.
NSEL maintains that it cleared all requests made till August 21 on the e-series front and informed the brokers forum of BSE. The brokers forum dispute this, since the board members have to sign the request form to give cash or in physical form and most of them have quit or dismissed. Only after the board members sign and the bullion traders association countersign can the metals be released.
E-series investors doubted whether the gold, platinum and silver stocks that they bought really exist, leading NSEL to conduct an audit of warehouse stocks. NSEL auditors say that there was no discrepancy in stocks and investments. But, investors are not satisfied and say that the auditors’ statement is covering up some points and is a false comfort offered to investors.
One point for instance is that purity checks were done on bars where purity checks were produced. What about those who did not have certificates? The only route open is to take the issue of e-series investors to Forward Market Commission (FMC), the regulator to push NSEL to clear the redemption request.
NSEL now says that instead of giving the metal in physical form, it will give cash and this again is seen as false comfort. NSEL that promised to give money to spot contracts has not been able to do so.