Last week, the NSEL board went one step further, launching a formal complaint against Sinha and his team before the Economic Offences Wing (EOW) of Mumbai Police. The board has alleged that the erstwhile management was probably hand in glove with the entities that defaulted on their payment obligations leading to the collapse of the exchange.
According to persons familiar with the matter, the EOW has formed a special investigation team and is collating information from other regulatory agencies, including the Registrar of Companies and the FMC. The Mumbai Police wing, however, has not yet called anyone for interrogation or recording of statement.
The complaint says that whatever was the promise about collateral security, that is not there. The management that was supposed to do all the due diligence and check everything was probably hand in glove with them which led to the entire fiasco, said a person privy to the matter.
It will be a crime if it is proved that the loss was because of inducements coupled with the fact that people who had induced were aware that the system is going to crack, added the person on condition of anonymity. A formal first information report (FIR) has not been registered yet.
The board also alleged that it was not aware of the developments that led to the settlement crisis. While the NSEL complaint too named the defaulters, some investors have filed separate complaints with the EOW alleging the board too was responsible for the fiasco.
Sources add that the EOW, which investigates white collar crimes, will look at the aspect of criminal offence, if any, along with information hinting at misappropriation of funds, cheating and forgery. NSEL has already sacked its MD & CEO Anjani Sinha and six other officials, including the chief financial officer and heads of business development and market operations.
According to sources, FMC has recommended to the government that a multi-agency team should take charge of the investigations, since that there are enough indications of criminal fraud, money laundering, embezzlement and siphoning of funds.
Incidentally, the initial report by Swiss firm SGS appointed to audit the stocks lying in various warehouses is also believed to have confirmed the suspicions related to warehouse fraud and missing stocks. Only around 15% of the stocks that were initially claimed were actually found during the audit. Of the 23 odd warehouses examined, stocks worth only Rs 300 crore was found, against the Rs 2,000-crore stock that was indicated to be lying at the warehouses concerned. The audit firm was also denied entry to some of the warehouses, hinting at complicity between borrowers and the exchange, said sources.
NSEL, which is scheduled to make another round of payments to investors on Tuesday, may default once again. Till August 31, NSEL had received Rs 110.75 crore in the escrow account from the borrowers. The exchange is supposed to make payments to the tune of Rs 174.72 crore every Tuesday for 20 weeks. The exchange paid out just Rs 92 crore in the first round and Rs 12.60 crore in the second round.