Interestingly, according to the statement filed by Anjani Sinha, former CEO, NSEL, who was sacked along with Pandey on August 20 Pandey played a key role in bringing on board members like PD Agro Processors, ARK Imports, Namdhari Food International, Namdhari Rice & General Mills, Lotus Refineries, White Water Food and Yathuri Associates which collectively owe NSEL nearly R2,200 crore.
Sinhas affidavit, filed with the Economic Offenses Wing (EOW) and the Forward Markets Commission (FMC), blames two management officials Amit Mukherjee, who headed business development and Jai Bahukhandi, responsible for warehousing. I do not have comprehensive, concrete and specific information about personal benefits derived by senior management team of NSEL from any of the buying members. However, I suspect that they might have entered into dealings with the buying members for their personal benefit, Sinha said in the affidavit.
Sinha maintained in the 13-page affidavit that the board of directors and the promoters namely Jignesh Shah were not aware of the crisis that was building up in the exchange.
Our promoters have not derived any advantage out of the NSEL operation, said Sinha adding that they (promoters) have given their own funds for settling dues of small clients of NSEL.
NSEL is currently embroiled in a Rs 5,600-crore settlement crisis which came to light in late July. The exchange has been unable to meet its payment obligation of Rs 174 crore per week for four consecutive weeks with borrowers failing to make good their dues.
In his statement on September 11, Sinha said: Most of the buyers who have defaulted are from Punjab and Haryana, who were introduced by... Pandey, who stays at Karnal, Haryana. He has also said that some senior management staff might have entered into dealings with the buying members for their personal benefit, without naming Pandey in this context.
Maneesh Pandey has been incommunicado since around mid-August. Around that time, when outstation executives were asked to report in Mumbai, he had excused himself citing medical reasons. He was handling business development at the Haryana sector for NSEL, a person familiar with the matter, said.
A call to Pandey's cellphone received an automated reply saying, all the services of this Vodafone mobile phone have been temporarily suspended. A spokesperson for NSEL said that since the matter is under investigation, we would not like to comment.
Meanwhile, the government on Monday held meetings with key stakeholders of the NSEL crisis including promoter Jignesh Shah and investors .Soon after the meeting, Shah said he was not a beneficiary of the scandal adding he was committed to recovering the money. We will do everything to recover the money. The whole focus should be on 23 borrowers to whom the money trail leads, Shah told newspersons. Asked if he would step down from MCX, the futures exchange promoted by the FTIL, Shah said If I am asked to step down, then let it be handled at that time. Right now, our sole focus is investors.
Arvind Mayaram, secretary, Department of Economic Affairs, told the reporters after the meeting, If there is breach of law then guilty will be punished. Earlier in the day, the working group headed by RBI Deputy Governor K C Chakrabarty which is looking at systematic risks has submitted its report to DEA.
Sinha alleges in the affidavit that Amit Mukherjee was responsible for introducing buyers with bad credentials and not informing the management about possible diversion of funds by the buyers. If the buyers are investing funds into real estate, they should know it from the local sources immediately, he said. Sinha also alleges that Mukherjee was given Rs 35 crore by a director of Mohan India, which owes the exchange Rs 575 crore.
The former CEO has further put the blame on the warehousing team headed by Jai Bahukhandi (who was sacked on August 20). The violation done by the warehousing team is the most severe. The weakest link in the entire episode is the warehouse management, he said. Again Sinha alleges that Bahukhandi may have received undue benefits citing a high end SUV purchased by him for a sum of Rs 17-18 lakh.
Sinha, however, says that he did not receive any personal benefits. I have no relationship with any of the buying members... I have not taken any personal benefit from any of the buying members," states the affidavit.
On his role in the crisis, Sinha said that he was wrong in not informing the board about increasing exposure and risks of widespread default and relying on statements made by Bahukhandi about stock statement and Mukherjee about buyers' credentials without having cross verification.
He also acknowledged that the exchange, which was initially developed as a delivery based trading platform, gradually became more of a financing model. This attracted large number of clients/investors towards NSEL, because they started getting good returns on their investments (ranging between 14 to 18%) on annualized basis, he stated.