J~EL

advocates

& solicitors

16 September, 2013 To, Mr. Arun Dalmia,

Technocraft House,

A-25, MIDC Industrial Area, Road No.3, Opp. ESIC Hospital, Andheri (East), Mumbai 400093.

Dear Sir,

Our client, Mr. Jignesh Shah, has instructed us to reply to your letter dated September 13, 2013 ('Letter') addressed by you to him, as follows:-

1.

At the outset, since the so-called NSEL Investors Forum is not a legal entity, our client is treating the Letter as having been addressed by you in your individual capacity. Please note that you have no locus standi
whatsoever to address this letter or give any directions whatsoever as

contained in the LeUer. Please also note that as an investor, you do not have any recourse against National Spot Exchange ltd ('NSEL') or its Directors except to your Trading or Clearing Member. At the further outset, our client denies all the allegations and claims made by you in the said Letter. The contents of the said letter are completely false and fabricated. Without prejudice to the aforesaid, we shall now deal with your letter in seriatim:

2.

With reference to para 1 of the Letter, our client does not admit the
correctness of what is stated

by you.

3.

With reference to para 2 of the Letter, our client emphatically denies that any fraud has been perpetrated by Financial Technologies (India) Limited ('FTIL') andlor its Board of Directors as alleged by you or otherwise or at all. NSEL has constituted a Committee which is in the process of carrying out a detailed internal investigation to ascertain the role of the CEO, CFO and other senior officers of NSEL for any alleged acts of wrong doing against NSEL and its members. As you are well aware, the Economic Offences Wing of the Mumbai Police is also investigating on complaints made by NSEL In addition, NSEL has appointed Grant Thornton India to
carry out a forensic audit. While all these investigations are in progress, our

'.

J. SAGAR ASSOCIATES
Vakils House, 18 Sprott Road, Ballard Estate, Mumbal . 400 001, India T: +:.91 224341 8600 F: +91 224341 8617 E: mumbai@jsalaw:com
New Dell'll I Gurgaon I Bangalore I Hyderabad

advocates & solicitors

client has prima facie reasons to believe that there has been collusion

between some of the senior officers of NSEL and some of the defaulting members. As per information, NSEL has temporary discharged its MD & CEO from his current responsibilities and other concerned officials pending investigation. However, no Director of NSEL or FTIL, including our client, is directly or indirectly involved in day-to-day matters, decisions including any
manner in such acts of wrong doing or collusion or were even aware about

the state of affairs until the situation unfolded itself about six weeks ago. 4. With reference to para 3 of the Letter, our ciient does not admit the
correctness of what is stated in this para. save and except to reiterate what

is stated in paragraph 3 of this reply. 5. With reference to para 4 of the Letter, your allegation that any alleged fraud was within the knowledge of our client is not only misconceived but also false and unsubstantiated. Such allegations are made as and by way of harassment and defamatory of our client and our client reserves his rights to adopt civil and criminal proceedings against you, in this regard, as he may be advised. With reference to para 5 of the Letter, our client does not admit the
correctness of what is stated in this paragraph save and except to reiterate

6.

that neither FTIL including our client nor the Board of Directors of NSEL were aware of any alleged fraud or any other act of wrong doing. 7. With reference to para 6 of the Letter, it is denied that the statutory auditors are appointed by our client and this allegation is also unsubstantiated and defamatory. With reference to para 7 of the Letter, the allegations contained therein are
denied inasmuch as the same are deliberately distorted and twisted. It is totally incorrect in law and in fact that our client was the directing mind or

8.

the alter ego of NSEL. It is denied that it was with our client's knowledge and consent that all aspects of execution and follow up by NSEL were being implemented. Our client has always been a non-executive director of
NSEL and as such, he was never involved in the day-to-day management

of NSEL. 9. With reference to para 8 of the Letter, it is denied that our client was a key functionary or a key member of the NSEL management team or that he designed, executed or perpetrated any alleged fraud. These allegations
are once again false, unsubstantiated and defamatory. The contents of this para are nothing but a mere attempt to connect our client with the entire matter without any basis whatsoever.

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advocates & solicitors

10.

With reference to para g of the Letter, our client denies that NSEL's affairs were closely monitored by FTIL as alleged by you. FTIL has no liability for NSEL. Once again, your allegation that FTIL was knowingly a party to the carrying on of day to day business I operations of NSEL in a fraudulent
manner is a false and unsubstantiated allegation. We are instructed to

state that the entire day-to-day business and operations of NSEL was managed by the team of professionals. 11. With reference to para 10 of the Letter, its contents thereof are denied. FTIL has never supervised or directed the affairs of NSEL nor is FTIL or its directors liable for any alleged fraud in NSEL. Your other allegations of criminal offences being committed by FTIL or its directors are false, unsubstantiated and defamatory in nature and our client will be be
constrained to institute civil and criminal action against you for such

defamatory statements. 12. With reference to para 11 of the Letter, our client, as the non-executive director of NSEL has made his best endeavours to ascertain the truth of the
entire episode and will assist in continuing the investigations.

13.

With reference to para 12 of the Letter, it is denied that our client, FTIL or its Board of Directors has committed any offence as alleged or otherwise or at all. With reference to para 13 of the Letter, our client is at complete iiberty to deal with his personal assets in any manner he desires. Similarly, FTIL is at complete liberty to deal with its assets in accordance with the law and in the
interest of the company. Our client denies your allegation that he is making

14.

any attempt to distance himself from the situation. Since our client is not liable at all, the question of absolving himself of liability, as alleged by you,
just does not arise. Our client neither wishes to make any comment nor he
is obliged to give you any information about how he deals with his assets

and his personal affairs. All your other allegations are denied as being false and unsubstantiated. 15. With reference to paras 14 and 15 of the Letter, in light of what is stated above, our client's assets has no relevance whatsoever to the NSEL
situation. It is ludicrous that you are seeking to "direct" our client as if you are a court of law or a regulatory authority. In any event, your requisitions

have no basis in law and our client is not obliged to consider or comply with
any such requisition.

16.

With reference to para 16 of the Letter, if despite this reply, should you be ill-advised to initiate any legal action as threatened, the same shall be vehemently defended at your sole risk as to costs and consequences.
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advocates

& solicitors

17.

With reference to para 17 of the Letter, you have no rights either against FTIL or its directors including our client. Last but the least, should you further publish the letter and this letter in reply to third parties, our client shall be constrained to institute civil and criminal action against you for defamation, which please note.

Yours faithfully, For J. Sagar Associates,