The document critiques the FMC's biased treatment of the FTIL-NSEL merger, alleging unreasonable actions and a failure to address defaulters. It suggests that the NSEL crisis was exaggerated due to FMC's focus on punitive measures rather than cooperative crisis resolution. The document calls for regulatory support to help NSEL recover funds rather than pursuing the merger.

1. FMC’s unfairness towards
FTIL-NSEL merger

2. • Unreasonable FMC
• Partiality of FMC towards Defaulters
• Prejudicial treatment to NSEL by FMC
• NSEL rejoinders to FMC
• Conclusion

3. Unreasonable FMC
• FMC has being continuously showing bias towards FTIL-NSEL merger,
leaving other players untouched
• There is a good scope for exploring options & alternatives for crisis
resolution involving cooperation of various agencies instead of
implicating only FTIL
• The crisis was solvable, but was blown out of proportion by action of
FMC, which focused on disciplinary action first even prior to an
investigation
• NSEL crisis was treated differently than any other previous crisis in the
financial sector
• It seems like FMC is deliberately attempting to malign & destroy the
group

4. Partiality of FMC towards Defaulters
• FMC has not disclosed what transpired in their one on one
discussion with defaulting members on Aug 11, 2013
• FMC has done nothing to undertake a forensic audit of
defaulting members to know trail of funds
• FMC has not complained to EOW, CBI or ED against any
defaulters or proceed to court against defaulters
• FMC has not been meeting NSEL board as frequently as they
have been meeting brokers & trading clients

5. Prejudicial treatment to NSEL by FMC
• FMC has only acted against NSEL & NSEL Board, FTIL & its
promoters
• NSEL crisis has been treated & dealt with differently than any other
previous crisis in the financial sector leading to a suspicion of a
deliberate attempt to malign & destroy the group
• FMC has been changing his stands in NSEL matters even before the
crisis erupted
• NSEL had a valid & legal business model. There was no omission or
commission on part of NSEL board
• In July 2013 FMC replied to the government that exemption in 2007
was general. Therefore where did the question of illegality arise to
suspend trading at NSEL?

6. Comments of Chairman
FMC
NSEL Response
NSEL has little capital to pursue recovery
of funds from defaulters
NSEL is fully supported by FTIL & has spend huge
amounts in recovery suits in the High Court as well
administrative expenses
NSEL has few staff NSEL has adequate staff for legal & recovery issues
NSEL has no capacity to recover NSEL has capacity to recover money & is doing everything
possible
NSEL has no money to pay legal expenses NSEL is well supported by FTIL for contesting legal cases
Holding company should step in to pursue
recovery
Instead of pursuing FTIL-NSEL merger, FMC should
support NSEL to expedite recovery process
FMC does not have power to regulate
NSEL
DCA wrote a letter to FMC on 5th Aug 2011 giving power to
oversee NSEL for investor protection & also seek
information as designated agency & do the needful
NSEL has been asking FTIL for funds, we
were told in meetings, but they were not
getting help
NSEL has been getting prompt help to meet all court,
legal &administrative expenses from FTIL
NSEL rejoinders to FMC

7. Conclusion
• Investigation by EOW has revealed that the entire outstanding of
clients are with 22 defaulters
• Instead of merging NSEL with FTIL the real solution lies in
trading clients, brokers & government agencies joining forces with
NSEL to ensure recovery
• 85% of monies are only with 7 defaulters
• Regulatory institutions should instead extend their support &
should have maybe even provide temporary liquidity to overcome
this crisis

8. Thank You