Knitwear exporters here who are fighting the banks against the cumulative loss of Rs.300 crore suffered by them after been ‘lured’ by banks to purchase its ‘exotic forex derivative’ products, is seeing the recent rulings by Australian Federal Court on similar derivative issues with hope.
The exporters here suffered the losses after purchasing the ‘exotic derivative products’ to hedge against the foreign exchange fluctuations occurred in 2008.
“The Australian court’s verdict two days ago holding responsible a leading multi-national bank, which is involved in the case of Tirupur exporters also, and a prominent multi-national ratings firm for misleading investors by giving very high ratings for complex derivative products leading to 2008 global financial crisis, has vindicated our stance against such products,” Raja Shanmugam, an exporter and president of Forex Derivatives Consumer Forum, told The Hindu .
The Forum was constituted of aggrieved exporters who lost the huge sum by purchasing such ‘exotic forex derivative products’.
The Australian Federal Court, in another recent verdict, had ruled a prominent global investment bank liable for millions of dollars of losses incurred on customers who bought different types of derivative products.
“These rulings by Australian court will be helping member exporters of the Forum here in their ongoing legal battle against the banks in various courts across the country including Supreme Court.
“It will also enable us to vacate the stay obtained by banks in Supreme Court against the Central Bureau of Investigation’s inquiry ordered by Orissa High Court on sale of dubious derivative products following a petition by Orissa-based businessman Pravajan Patra,” Mr, Shanmugam said.