NBHC faced quality issues with Coriander stock in one of its warehouses and the stock is currently undergoing sampling and testing.
Choudhary says SEBI is reviewing norms to strengthen warehousing facilities in the commodity futures market to ensure integrity of delivery mechanisms and bring transparency in the field.
SEBI and exchanges like NCDEX ensure that only credible warehouse service providers function, he says.
Below is the transcript of Anil Choudhary’s interview to Manisha Gupta on CNBC-TV18.
Q: What are the issues that we are seeing right now when it comes to quality and storage issues when it comes to commodity warehouses?
A: We are about 16-17 months old in National Commodity & Derivatives Exchange Limited (NCDEX) and I am very happy to tell you that we have handled almost about two lakh tonnes in 16-17 months, almost 14 commodities, over 9-10 states have bought 70 warehouses. Our experience has been very encouraging and we have seen NCDEX systems and processes, various trades, doing regular audits, visiting warehouses to ensure that we remain on track. We have also faced a completely unwarranted issue in one of our Kota warehouses which seem to be kind of a planned attempt to bring dispute to us. Things are all being investigated. But I am sure that the exchange, NCDEX and other exchanges will take enough precautionary measure to ensure that credible WSP come onboard and they conduct their business as per the standard operating procedures (SOP) led out by the exchanges.
Q: Corriander in the recent days has seen quality issues and a lot of drama around it as well. How, as a warehouse service provider, are you clarifying on it?
A: Unfortunately, it happened on 25th night Kota and it was a regular work that our warehouse supervisor was doing along with the help of external labour and labour contractor, a few bags had fallen down and a stack has slightly tilted and he was trying to correct it and that is what we do. In fact we wanted to do during the day time, but the contractor was busy somewhere else. He came at six, his labourers came at about 8 o’clock. So, without apprehending and without anything else in his mind, he started the work and a few people came first and then 20-25 people came in alleging that we are changing the stock. The warehouse is completely full, there were inward-outward, absolutely no sign. I do not know from where all these allegations came up. They were also man handled, threatened, all of those things. Some of our people were strewn and thrown from those stacks, etc. and thereafter, there has been completely re-sampling and analysis going on. I can reassure the exchange, the entire commodity ecosystem that we do our business with honesty.
Let me also add here that what is more important for us as to how we do business rather than how much business we do. We are a commercial organisation, so definitely we are there for profits, do more business. But how we do business is far more important for us. So rest assured I can assure and reassure the market and everybody who has a stake in the NCDEX commodity ecosystem that nothing absolutely will be found out which is extraordinary or inordinate. We deal in agri-commodities, one can see 0.01-0.02 percent differences here and there, but we stand by that.