The probe has also revealed that the board of the exchange, including Jignesh Shah, was aware of the developments at the bourse and, at times, even backed some of the borrowers in the form of a guarantor.
NSEL was a ponzi scheme under the garb of an exchange. The money kept rolling because new investors were coming on board. There were no warehouses or commodities and no records of genuine trades. There are false entries just to show that there was an outstanding against a particular entity. It was purely an illegal financing scheme where people were getting 15% returns. There are a lot of instances of fudging of accounts and it appears to have gone on for a long time, said a senior official of the EOW.
The Mumbai Police wing has already arrested two former employees Amit Mukherjee and Jai Bahukhandi of NSEL and questioned Shashidhar Kotian on Friday. Kotian is the former chief financial officer of NSEL who was sacked on August 20. Both, Mukherjee and Bahukhandi, have been sent to police remand till October 18.
Sources further added that it has emerged that the main beneficiaries were Anjani Sinha former MD & CEO of NSEL and his coterie. These people were getting a kickback of 3% every time they were arranging money for the borrowers. They were getting illegal gratifications, said the source.
Interestingly, some of the acts of the promoters and the directors of NSEL have brought them under the scanner along with the senior management of the exchange. The cops have questioned the rationale of the board standing guarantor to certain loans even though it was clear that they were defaulting on their commitments.
The police is also looking into the structure of the agreements between the exchange and the borrowers. These are sham agreements. We believe in one particular case, a borrower filed a civil suit, openly stating that NSEL told him that the money can be utilised in any form in the business and, today, it (NSEL) is claiming that there is outstanding commodities against it, said the official familiar with the probe.