Advantage BJP as aggrieved NSEL investors turn to Modi for help

Even as the Economic Offences Wing of Mumbai Police froze58 bank accounts of the crippled NSEL, aggrieved investors met Gujarat chief minister Narendra Modiafter being cold shouldered by the central government, to recover their investments.

A group of investors led by NSEL investors’ forum convenor Sharad Saraf met with Modi in Gandhinagar on Monday apprising him of what went wrong and how they suffered because of the default by a few members of the commodity spot exchange.

Rather than being sympathetic to the cause of investors, Economic Affair Secretary Arvind Mayaram, last week told investors, ‘You are high net worth individual and well informed; Why did you trade on the NSEL?"

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Finance Minister P Chidambaram too did not soothe investor nerves.

[caption id=“attachment_1101061” align=“alignleft” width=“380”]  A group of investors led by NSEL investors’ forum convenor Sharad Saraf met with Modi in Gandhinagar on Monday apprising him of what went wrong and how they suffered because of the default by a few members of the commodity spot exchange.
PTI[/caption]

“I think there is much more to the way NSEL started business than meets the eye. People seem to have given money to NSEL promoters with open eyes that it is not a regulated entity that is violating conditions from Day One. Yet they were giving money to NSEL. Many of them made money in initial stages and some of them lost money now,” he had said.

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These remarks surely didn’t go down well with investors who have now turned to the Opposition party to bring back their money.

NK Proteins, a company owned by former NSEL chairman Shankarlal guru’s son-in-law, is the largest debtor to NSEL. Other Gujarat-based borrower is Swastik Overseas Corporation. Both the companies have combined dues of over Rs 1,060 crore.

The two entities account for nearly a fifth of the Rs 5,600-crore the exchange owed to some 13,000 investors, according to this Business Standard report.

“We went to Ahmedabad today (Tuesday) on Mr Modi’s invitation…..we also told him that two of the defaulting borrowers - NK Proteins and Swastik Overseas - were Ahmedabad-based and handed over their contact details and addresses to him,” Sharad Saraf, convenor of NSEL Investors Forum, was quoted as saying by the Economic Times.

“Modi is the Prime ministerial candidate and shows interest in economic issues. Also, a couple of borrowers including the largest borrower NK Proteins are based in Gujarat. Therefore, we are seeking his help in the recovery,” a large investor privy to the development was quoted as saying by the BS.

While Modi has assured them of his help, there is little that he can do in the matter as the CBI has taken over the case. However, investors are hopeful Modi can at leastpressure the two borrowers from Gujarat to pay up.

Whether this meeting would be fruitful in getting their money back is still unknown but surely the BJP has gained some brownie points with the investor community.