Crisis-ridden NSEL’s ex-chief Anjani Sinha has blamed the entire former senior management, including himself, for the Rs.5,600-crore payment crisis that has engulfed the bourse.
Mr. Sinha is suspecting that some of the former senior management might have entered into dealings with buying members for their personal benefits, and demanded a judicial inquiry against them, according to an affidavit filed before a local court in Mumbai.
National Spot Exchange Ltd (NSEL), promoted by Jignesh Shah-led Financial Technologies (India) Ltd., is facing the problem of settling Rs.5,500-crore dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on government’s direction.
Mr. Sinha has found fault with business development team for introducing buyers with bad credentials into the NSEL system.
Blaming warehousing team
He also blamed the warehousing team for not having adequate control on physical stock and also for making ‘false stock statement’.
“The violation done by the warehousing team is the most severe. The weakest link in the entire episode is the warehouse management,” Mr. Sinha said in the affidavit. He also admitted submitting “wrong stock statement” to the board and regulator FMC based on the report by the warehousing division.
Taking the blame on himself for not informing the board about increasing exposure and risk of widespread defaults, Mr. Sinha said the management allowed the exchange to function and did not stop trading due to fear of widespread defaults.