(BY PERSONAL DELIVERY & COURIER) September 13, 2013 To Mr Jignesh Shah, Director and Vice-Chairman National Spot

t Exchange Limited (NSEL), FT Tower, CTS No. 256 & 257, 4th Floor, Suren Road, Chakala, Andheri (East), Mumbai - 400 093 Dear Sir, Re: Disposal and/or creation of rights and/or interest over assets of Mr. Jignesh Shah and/or Financial Technologies (India) Limited (FTIL) 1. We have reliably learnt that Mr. Jignesh Shah is presently in advanced discussions with a prospective investor for sale of substantial part of his shareholding in Financial Technologies (India) Limited (FTIL). Further, we understand that as part of the proposed commercial arrangement, Mr. Jignesh Shah is also likely to grant the prospective investor a preemptive right over the assets of FTIL including the shareholding and interest of FTIL in its subsidiary companies. 2. It is now clear that a well scripted fraud has been perpetrated by FTIL along with the board of directors and senior management of National Spot Exchange Limited (NSEL) in complicity with the defaulting members. 3. The press release issued by NSEL on September 10, 2013 confirms the position of the stock and expressly states that as per the audit of the NSEL warehouses conducted by SGS, significant stock shortage has been found in 9 so-called NSEL accredited warehouses relating to 7 defaulters and SGS audit team was not even allowed inside the premises of the majority of the NSEL warehouses, i.e. 29 warehouses relating to 11 defaulters. Accordingly, it is now clear that NSEL, a commodities exchange, in fact operated without any underlying commodities. The widespread shortage of goods in the NSEL designated warehouses confirms that a large scale fraud has been committed. 4. The fraud perpetrated in the present instance percolates to the very root of the transaction, the first step of the entire trade on NSEL being the deposit of the commodities in the socalled NSEL accredited warehouses. It is now clear that the NSEL accredited warehouses did not have the requisite storage capacity to hold the quantity of the stock collateral for the trades on NSEL to begin with. Therefore, it would be an irrefutable conclusion that such a basic, schematic and systemic fraud was within the knowledge of Mr. Jignesh Shah. 5. Further, the fact that (a) majority of the NSEL accredited warehouses were not independent properties but merely designated areas within the premises of the defaulting members; (b) in majority of the trades, the seller or a group company of the seller in the first settlement cycle was the buyer in the second settlement cycle and thus, the same entity was trading in

both positions; and (c) the 24 defaulters are themselves registered as members of NSEL and therefore, Mr. Jignesh Shah, the board of directors and senior officials of NSEL were well aware that these thinly capitalized entities would have a limited ability to honour their settlement obligations; points to a premeditated and well-planned scam to dupe unsuspecting investors. 6. We are also certain that M/s Mukesh P. Shah, Chartered Accountants, Mumbai, a related party, was deliberately appointed by Mr. Jignesh Shah as the statutory auditors of NSEL to ensure that the fraudulent activities of NSEL do not come to light. 7. As the Chairman and Chief Executive Officer of the Financial Technologies Group, Chairman and Managing Director of FTIL and the Vice-Chairman and Director of NSEL, Mr. Jignesh Shah has been the moving force and directing mind behind NSEL. NSEL is nothing but the alter ego of Mr. Jignesh Shah. Mr. Jignesh Shah has been responsible for evolving several products which were marketed by NSEL through the NSEL officers and he was a substantial benefactor of NSEL. Therefore, it was within the knowledge and with the consent of Mr. Jignesh Shah that all aspects of the execution and subsequent follow-up were implemented. 8. Mr. Jignesh Shah has also actively promoted and marketed the NSEL as a commodities exchange and made several assurances to investors and members on the basis of which they participated in the NSEL Exchange. In fact, the NSEL brochure entitled The new Face of Commodity Market (NSEL Brochure) contains the photograph of Mr. Jignesh Shah and it is touted that Mr. Shah is often credited as the Innovator of Modern Financial Markets for his role in creating successful public-private partnership (PPP) model for building worldclass financial institutions in emerging economies. Therefore, it is irrefutable that Mr. Jignesh Shah was a key functionary and key member of the NSEL management team and it is inconceivable that he was not aware of the manner in which the affairs of NSEL were being conducted. In fact, given the all pervasive control exercised by Mr. Jignesh Shah, it is an inescapable conclusion that he designed, executed and perpetrated the fraud. 9. FTIL is the promoter of NSEL, holding a controlling stake of 99.99% in NSEL. FTILs track record in domestic as well as foreign exchanges was marketed by FTIL and Mr. Jignesh Shah, as the basis for obtaining more investors for NSEL. In the NSEL brochure entitled The new Face of Commodity Market , NSEL has claimed that FTIL was a global leader in creating and operating technology centric next generation financial markets that are transparent, efficient and, most importantly, liquid. Further, the experience of the Financial Technologies Group in operating a network of 9 exchanges connecting Africa, Middle East and South East Asia, as well as India is also trumpeted in the NSEL Brochure. Mr. Jignesh Shah is the promoter, Chairman and Managing Director of FTIL. FTIL and NSEL also had common directors at the relevant time, namely Mr. Jignesh Shah and Mr. R. Devarajan. Given that NSEL contributes to approximately 50-60% of the overall profits of FTIL and is a material and profitable subsidiary of FTIL, it is only natural that its affairs were closely monitored by FTIL. Therefore, it is an inescapable conclusion that FTIL was knowingly a party to the carrying on of the business of NSEL in a fraudulent manner. 10. The inaction of the board of directors of FTIL in supervising and directing the affairs of FTIL appropriately has resulted in FTIL directing NSEL to operate through misrepresentations, acts of cheating, criminal mis-appropriation of assets, issuance of warehouse receipts without ensuring their being underlying goods, forgery in issuance of false warehouse receipts. The board of directors of FTIL, was in fact the custodian of the

assets of FTIL, which included NSEL, and there has been complete failure by the FTIL board to manage such assets commensurate with its fiduciary duties. We strongly hold FTIL liable for the fraud perpetrated in the operations of NSEL. 11. Ever since the present crisis has arisen, Mr. Jignesh Shah has deliberately misstated, misrepresented and given contradictory details of the stock lying in the exchange certified warehouses and have engaged in and continued with deception and trickery. 12. In light of the above, it is clear that offences have been committed by FTIL, Mr. Jignesh Shah, the board of directors and senior management of NSEL, inter alia under the Indian Penal Code of 1860, the Companies Act of 1956, the Forward Contracts (Regulation) Act of 1952, Warehousing (Development and Regulation) Act, 2007 and the Prevention of Money Laundering Act, 2002. 13. The present attempt by Mr. Jignesh Shah to dispose part of his shareholding in FTIL while the default continues is very evidently an attempt to intentionally distance himself from the on going crisis and absolve liability for the systematic fraud perpetrated by NSEL. In fact, we strongly apprehend that such a proposed sale of shares of FTIL and creation of interest over the assets of FTIL, is not a genuine transaction and is merely a clever ruse to deflect attention from the liability for the present fraud. Given the consistent failure by NSEL in satisfying the first, second and third pay-out as per the payment schedule, the magnitude of the amounts involved and the seriousness of the issues, it is imperative that the assets of Mr. Jignesh Shah are not frittered away so as to frustrate recovery of outstanding amounts. 14. Any disposition of assets by FTIL, as the promoter of NSEL, or Mr. Jignesh Shah, the key functionary of NSEL, in the present circumstances will seriously put at peril recovery of investor funds of over Rs. 5,500 crores. Given that the amount involved is large, it is absolutely necessary to safeguard and preserve these assets till such time as the outstanding amounts are not paid to the investors. 15. Accordingly, you are hereby directed to take notice that pending settlement of the outstanding contracts and fulfilment of the outstanding payment obligations, you are precluded from undertaking any of the following: i. dispose off, directly or indirectly, any assets of Mr. Jignesh Shah and/or FTIL, whether pursuant to an agreement or otherwise, which would result in frustration of any recourse by the investors to the assets of FTIL and Mr. Jignesh Shah; offering or creating any rights or interest, whether directly or indirectly, over the assets of Mr. Jignesh Shah and FTIL, including specifically the shareholding or interest of FTIL in its subsidiaries, whether pursuant to an agreement or otherwise.

ii.

16. We will be compelled to take appropriate legal action, including criminal action, against you if you proceed to dispose off or create any rights/interest in any assets owned by Mr. Jignesh Shah and/or FTIL, whether pursuant to an agreement or otherwise, pending the settlement of the outstanding defaults.

17. We are also by this letter putting the entire Board of Directors of FTIL on notice. We reserve our rights to proceed against other Board members in accordance with law. Please note that this letter is without prejudice to the other rights available to us under law, equity or otherwise. Yours faithfully, For and on behalf of NSEL Investors Forum Sd/Arun Dalmia Secretary Mobile: 9821013308 Email:arundalmia2000@yahoo.com