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NSEL commences payouts to unit holders of e-gold contracts

LiveMint logoLiveMint 23-05-2014 Ashish Rukhaiyar

Mumbai: The National Spot Exchange Ltd (NSEL) said on Friday that it had commenced a payout to more than 21,000 unit holders of its e-series gold contracts.

The payout will be made at an average rate of Rs2,935.9925 per unit (i.e per gram), according to a statement issued by the exchange, which is engulfed in a Rs5,574.35-crore payments crisis that is under investigation by multiple agencies.

E-series contracts are those in which retail investors can buy and sell commodities in dematerialized form. Nearly 33,000 investors had investments of around Rs525 crore in such contracts. NSEL offered e-series contracts on seven commodities—gold, silver, copper, zinc, lead, nickel and platinum.

The statement further added that a total of 85.5 kg of gold were released to the unit holders in the rematerialisation process. The remaining 532 kg of gold that were held by NSEL on behalf of unit holders were taken up for financial closure starting 8 May. Of this 477 kg of gold were sold through auction which is 89.70% of the stock available for financial closure, it said.

This means that all eligible unit-holders of e-gold will get a remittance to the tune of 89.70% against each unit. Remittance of the remaining 10.30% will be completed once NSEL auctions the remaining stock.

Meanwhile, for other metals, the auction is in progress and the direct payout will be released to eligible unit holders as per the circular issued by NSEL on 8 May.

“The activities for rematerialisation and financial closure were undertaken in a transparent manner through daily web updates of stock Available for rematerialisation, stock allocated, stock available for financial closure, sale of stock through auction, amount to be received by unit holders through such sale and remittance details of pay out to unit holders,” said the NSEL statement.

The settlement crisis at NSEL came to light on 31 July, when the exchange abruptly suspended trading in all but its e-series contracts. These were suspended a week later. On 14 August 2013, NSEL proposed a payout plan, but it has been unable to stick to the schedule.

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