Mohan India's Rs 771cr settlement plan hits regulatory snag

While Mohan India’s Rs 771 crore settlement plan has received an approval from the Maharashtra Protection of Interest of Depositors (MPID) court, it may have hit a roadblock as far as regulatory approval is concerned. Forward Markets Commission (FMC) is unlikely to approve this settlement plan, reports CNBC-TV18’s Aastha Maheshwari.

Mohan India, the second largest National Spot Exchange (NSEL) borrower had proposed a settlement plan of Rs 771 crore, to NSEL on October 30 by making Rs 11 crore down payment and then paying the remaining amount in monthly installments.

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While the Sessions court has recently approved this plan, clause number 8 in the settlement plan says that FMC has to have a final say on releasing the money from the escrow account. But according to sources, the regulator on their part is deeply concerned about the disputed Rs 221 crore, since the earlier outstanding was Rs 992 crore, and FMC is unlikely to give an approval for this settlement plan till they get a guarantee on who will take the responsibility of recovering the remaining Rs 221 crore.
NSEL and Mohan India have approached FMC seeking a nod on Rs 771 crore settlement plan, FMC is firm that it will not settle for a partial amount.
Meanwhile, Sahara Q shop who has given Rs 222 crore has also sought regulatory help to get their money back. But investors are concerned, they will have to wait and see whether  Mohan India will come out with a private settlement plan with NSEL or they will involve FMC in the scheme of things till the end or if FMC will allow investors to take the money that comes in the escrow as a part of a separate plan.