'NSEL woes because of bad people in management team'

In yet another setback to it, the National Spot Exchange Ltd on Monday saw non-executive chairman Shankarlal Guru and another director quit, blaming ‘bad people’ in the management team for the crisis at NSEL.

With the resignation of Guru and B D Pawar, the 5-member board of NSEL is now left with just Jignesh Shah, who owns FTIL which is the single largest promoter of NSEL, and Joseph Massey.

Another director Ramanathan Devarajan had reportedly quit last week.

NSEL, facing Rs 5,600 crore (Rs 56 billion) payment liability on commodities traded on its platform, had earlier this month sacked the entire top management including managing director and chief executive officer Anjani Sinha.

"I resigned from board of directors of NSEL on August 7 as I and B D Pawar felt that our mission of promoting agriculture marketing is not being followed and there has been such a big scam in the exchange, which is not the right thing. I have nothing to do with this issue," Guru told PTI.

The Non-Executive Chairman is not responsible for day to day functioning or running of the exchange, which is a task of the team led by the CEO.

Guru said he wants the payment crisis at NSEL to end, and ‘bad people’ on its management team punished.

"The government has the machinery and it should take the money and return the hard earned money of the investors.

“There are some bad people in the exchange who should be punished," he said.

He, however, refused to name the persons or elaborate on ‘bad people’ in NSEL.

Pawar, who resigned from NSEL board as director in the first week of August, said:

"The rules and regulations and the system were very good, but, some executives in the management team misused these rules and regulations and the Board was unaware of this."

NSEL is facing the problem of settling Rs 5,600 crore (Rs 56 billion) dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on government direction.

On the alleged mismanagement by NSEL executives, Pawar said: "Mismanagement, yes, because of these executives. “They should have concentrated more on side of actual day-to-day delivery, more procurement and some other work, which is directly related to agriculture.

“They misused the rules and regulations and washed away the priorities." On the reasons behind his resigning from the NSEL Board, without giving a straight answer, Pawar said: "I had joined it to promote cause of the farmers and the rules and regulations and the system were very good they were benefiting farmers, but, recently they (executives) misused the rules and regulations." On the issue of his son-in-law, the NK Proteins managing director Nilesh Patel's involvement in the controversy, Guru, who was the former Member of Legislative Assembly from Unjha (Gujarat), said he has not helped him in any way.

NK proteins is one of the biggest defaulters with a liability of Rs 929 crore (Rs 9.29 billion).

"I understand he is my son-in-law, but if he has done the wrong thing, he should be punished for it. I have nothing to do with this. I am being associated with it as I was the board chairman," he said.

"I have been serving the people for so many years and I'm in no way related to this crisis. If NK Proteins has done wrong, they should be punished," he said.