A few members of Association of National exchanges Members of India (ANMI) and BSE Brokers’ Forum (BBF) have voiced their concerns against the associations supporting the top five brokers who are made accused in the National Spot Exchange Limited (NSEL) scam.
An open letter has been written by a broker, who is also a member of AMNI and BBF, asking the associations to refrain from representing the accused brokers saying that doing so was “against the very spirit of the association”.
That broker with small set-up states that he was writing the open letter on behalf of a few other members as well and has said that they will disclose their identities at appropriate time in the interest of justice
The open letter has been shot off to Rajesh Baheti, President of ANMI and Uttam Bagri, Chairman of BBF, after the associations asked all its members to contribute Rs 5 lakh each to support their accused brokers in the NSEL scam. The associations claimed that it was important for them to fight the battle against NSEL together. Their move came after NSEL filed a petition in the Bombay high court seeking attachments of properties of all the brokers who were registered with the spot exchange.
Asking the associations to not support the accused brokers, the open letter draws comparison with recent scams that have rocked the market. The letter reads that the action of ANMI and BBF supporting the accused top five brokers could be compared to “FICCI or CII supporting Kingfisher / Vijay Mallya or any other NPA or wilful defaulter or Bullion / Jewellery associations supporting Nirav Modi / Mehul Choksi”.
As investigations by the Economic Offences Wing (EOW), Securities and Exchange Board of India (SEBI) and Serious Fraud Investigation Office (SFIO) have revealed, the top 5 brokers of NSEL have been found to be involved in large-scale malpractices and market misconduct.
The broker has urged the associations not to interfere at this stage since it would create doubt in the mind of the investigating agencies and public because of which all brokers would then be branded as culprits. Besides, several brokers too would doubt that “there is something more than what meets the eye and the association is trying to hide something to save a few influential members”, reads the letter.
The open letter has demanded that the brokers, against whom no aspersions have been cast by the investigating agencies, have legitimate right to know whether due process was followed by the associations while deciding to ask every broker to pay Rs 5 lakh.
“Before the association decided to step into the NSEL matter, who all were the members to write to the association seeking support and what communications were done in this regard?
In which meeting was such proposals considered, who were the office bearers present in such meetings, what were the discussions done and, what were the objections raised, if any, and the decisions taken?” questions the open letter.
The letter asks as to whether it was considered to call for a meeting of all the members before deciding such an important matter. Also, what was the basis on which the amount was decided and that each member was asked to contribute equal sum. It has also questioned whether the associations would furnish the names and details of all those who were involved in all the communication and the decision-making process.
Stating that they, as members, are Self Regulatory Organisation, expect complete transparency in the matter and do not wish to be party of this representation unless due process is followed and it is decision of all the members.
“For all such cases, respective members must prove their innocence without any support of the association and come out clean or face the consequences,” adds the open letter.
The broker has further stated they all want genuine claimants to get their dues of NSEL and that is the ultimate motive. “However, this will not be possible without full investigation and bringing the culprits to book. And if that leads to our own members, then be that so since the law must be allowed to take its own course,” adds the letter.
The letter has requested to support the investigating agencies and the regulator to resolve the matter and strengthen the business. “And in the process, if some of our members are found guilty, then it will cleanse our industry and give more business to remaining members earn us the valuable trust of our clients and the regulator,” the letter further adds.
Without mincing words, the letter has clearly stated that in case the associations decide to follow undemocratic process and favour a handful of members, “they (brokers) would be left with no option but to explore other remedies including approaching all exchanges, SEBI, media and other alternatives.”
A scan copy of the open letter is doing rounds in social media
Also read:
NSEL scam: 2015 police report gives SEBI fresh ammo against brokers
