NSEL--- RECOVERY NOT POSSIBLE; HOPING AGAINST HOPE

Tejinder Narang

OPTIONS ARE –

1.       Auction the stocks—but there are none or negligible.

2.       Liquidate defaulters’ assets—they are all shell companies, with no assets. Even if they have, assets are pledged to the bank. Primary right therefore is of the bank.

3.       Enforcement Directorate (ED) to pursue it---it can be investigations leading to jail and bail. No money gets recovered.

4.       Shift FMC to SEBI, Finance ministry— An internal governmental formality, no solace to losers of money.

5.       Legal action—suits NSEL and the Government; extended litigation; no pay in.

UNANSWERED QUESTIONS

a)      Where the money has gone? — shared between the owners and borrowers through smart shell companies or other means.

b)      What is the relationship between creditors and borrowers?—none. It is the NSEL that is the primary party and that is insolvent.

c)       Can owners be held responsible?—it is a case of professional mismanagement or corporate default. When share prices drop what action one can take against a company?? Book the losses only.

d)      What will happen to owners and borrowers of money—settlement through political connectivity.