NSEL says no discrepancy in e-series stock holdings in vaults
The exchange said its stock positions in gold, silver and platinum for e-series contracts tally with depository records
To help investors liquidate the e-series units, NSEL is in the process of providing an exit window to sell their units and realize cash payments. Photo: Ramesh Pathania/Mint
To help investors liquidate the e-series units, NSEL is in the process of providing an exit window to sell their
units and realize cash payments. Photo: Ramesh Pathania/Mint
Updated: Fri, Sep 06 2013. 12 00 AM IST
Mumbai: The crisis-ridden National Spot Exchange Ltd (NSEL) on Thursday said in a release that according to an audit report by Sharp and Tannan Associates, there is no discrepancy in the exchange's e-series stock holdings in vaults.
NSEL that owes Rs.5,572 crore to investors in the form of payouts towards trade settlement, said its stock positions in gold, silver and platinum for e-series contracts, which were suspended for trading on 6 August, tally with depository records.
To help investors liquidate the e-series units, NSEL is in the process of providing an exit window to sell their units and realize cash payments.
As per the exchange's instruction, a physical verification of stocks of precious metals lying with Brinks Arya India Pvt. Ltd at its vaults in Mumbai, Kolkata, New Delhi, Hyderabad, Ahme-dabad and Jaipur was conducted by Sharp and Tannan between 26 August and 31 August, an NSEL update on its website said.
However, the release added there is a backlog in settlement due to redemption pressure.
In a related development, the warehousing associate firm of Financial Technologies (India) Ltd, or FTIL, the parent firm of NSEL, clarified it does not handle the exchange's warehouses and that most of its managed stocks are funded by banks after independent audits by lenders.
National Bulk Handling Corp. Ltd (NBHC), in a statement on Thursday said: "In the light of NSEL development, most of the banks have conducted/are conducting audits of their stocks in NBHC's warehouses and no deviations have been found… Clients are welcome to visit the warehouses to check their stocks, to quell any fears whatsoever."
NBHC, however, said it did manage stocks at five warehouses of pre-stored commodities for NSEL in June and July, but did not issue any warehouse receipts against these stocks. NBHC added that it has given back the warehouses to NSEL along with balance stocks, and as on 5 september it had stocks worth Rs.65 lakh on behalf of NSEL.
The firm, which provides commodity and collateral management services along with its stakeholders—FTIL, group firm Multi Commodity Exchange of India Ltd (MCX), and State Bank of India—said it manages about Rs.5,500 crore worth of stocks, of which about Rs.4,200 crore of stocks are funded by banks to commodity owners such as farmers, processors and traders.
NBHC further clarified it acts as a warehousing service provider for MCX, which accounts for 5-7% of NBHC's total stock.
"The firm gives banks a guarantee that it will maintain the quality and quantity of the stock during its tenure… It may also be noted that cumulatively, banks have lent about Rs.35,000 crore against NBHC's warehouse receipts of about Rs.50,000 crore, out of which loans worth about Rs.32,000 crore have been repaid in the past 6-7 years," NBHC said in its statement.
The exchange said its stock positions in gold, silver and platinum for e-series contracts tally with depository records
To help investors liquidate the e-series units, NSEL is in the process of providing an exit window to sell their units and realize cash payments. Photo: Ramesh Pathania/Mint
To help investors liquidate the e-series units, NSEL is in the process of providing an exit window to sell their
units and realize cash payments. Photo: Ramesh Pathania/Mint
Updated: Fri, Sep 06 2013. 12 00 AM IST
Mumbai: The crisis-ridden National Spot Exchange Ltd (NSEL) on Thursday said in a release that according to an audit report by Sharp and Tannan Associates, there is no discrepancy in the exchange's e-series stock holdings in vaults.
NSEL that owes Rs.5,572 crore to investors in the form of payouts towards trade settlement, said its stock positions in gold, silver and platinum for e-series contracts, which were suspended for trading on 6 August, tally with depository records.
To help investors liquidate the e-series units, NSEL is in the process of providing an exit window to sell their units and realize cash payments.
As per the exchange's instruction, a physical verification of stocks of precious metals lying with Brinks Arya India Pvt. Ltd at its vaults in Mumbai, Kolkata, New Delhi, Hyderabad, Ahme-dabad and Jaipur was conducted by Sharp and Tannan between 26 August and 31 August, an NSEL update on its website said.
However, the release added there is a backlog in settlement due to redemption pressure.
In a related development, the warehousing associate firm of Financial Technologies (India) Ltd, or FTIL, the parent firm of NSEL, clarified it does not handle the exchange's warehouses and that most of its managed stocks are funded by banks after independent audits by lenders.
National Bulk Handling Corp. Ltd (NBHC), in a statement on Thursday said: "In the light of NSEL development, most of the banks have conducted/are conducting audits of their stocks in NBHC's warehouses and no deviations have been found… Clients are welcome to visit the warehouses to check their stocks, to quell any fears whatsoever."
NBHC, however, said it did manage stocks at five warehouses of pre-stored commodities for NSEL in June and July, but did not issue any warehouse receipts against these stocks. NBHC added that it has given back the warehouses to NSEL along with balance stocks, and as on 5 september it had stocks worth Rs.65 lakh on behalf of NSEL.
The firm, which provides commodity and collateral management services along with its stakeholders—FTIL, group firm Multi Commodity Exchange of India Ltd (MCX), and State Bank of India—said it manages about Rs.5,500 crore worth of stocks, of which about Rs.4,200 crore of stocks are funded by banks to commodity owners such as farmers, processors and traders.
NBHC further clarified it acts as a warehousing service provider for MCX, which accounts for 5-7% of NBHC's total stock.
"The firm gives banks a guarantee that it will maintain the quality and quantity of the stock during its tenure… It may also be noted that cumulatively, banks have lent about Rs.35,000 crore against NBHC's warehouse receipts of about Rs.50,000 crore, out of which loans worth about Rs.32,000 crore have been repaid in the past 6-7 years," NBHC said in its statement.
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