63 moons, the promoter of the defunct National Spot Exchange, and the NSEL Investors Forum have announced plans to establish an Escrow Agent and Monitoring Authority to supervise the disbursement of a ₹1,950 crore settlement.
Previously, both 63 moons and the NSEL Investors Forum had entered into a formal Settlement through a Scheme of Arrangement and submitted it to the National Company Law Tribunal, Mumbai. In an effort to safeguard the interests of investors, an Escrow Agent and Monitoring Authority will be appointed to oversee the distribution of funds to investors, as stated by NSEL Investors Forum (NIF) in a recent statement.
Sharad Saraf, Chairman of NIF, expressed that this development provides a concrete and equitable resolution after years of legal battles and uncertainty.
As per the terms of the agreement, 63 moons will make a one-time payment of ₹1,950 crore as a comprehensive settlement to the investors. In return, investors will transfer their claims against defaulters and others to 63 moons.
The settlement is anticipated to be mutually beneficial, ensuring that investors receive their funds with a negotiated reduction, while the 63 moons group is relieved from ongoing legal proceedings, according to NIF.
The majority of investors, both in terms of numbers and value, have approved the Settlement, indicating their preference for a peaceful resolution over prolonged legal disputes.
In 2013, approximately 24 investors defaulted on the NSEL trading platform, leaving thousands of investors awaiting the recovery of their dues. To date, over 7,000 investors with claims up to ₹10 lakh have been fully compensated.
However, for around 5,600 investors with claims exceeding ₹10 lakh, the recovery from defaulters has been meager, with only about 7% of their dues being recovered over the past decade.
Despite numerous legal proceedings and government interventions, the recovery process for these larger investors has been inadequate. The establishment of the Escrow Agent and Monitoring Authority aims to streamline the disbursement process and ensure a fair resolution for all parties involved.
