The Economic Offences Wing (EOW) of Mumbai Police on Monday registered a complaint in the ongoing National Spot Exchange Limited (NSEL) payments crisis, naming its board of directors and trading members as the accused in the case.
The Mumbai Crime Branch also launched a massive operation across the country, conducting searches at premises of 24 borrowers who have defaulted on payments and offices belonging to NSEL as well as its promoter, Financial Technologies India Limited (FTIL).
“We had received a complaint from Pankaj Saraf, who has formed the NSEL Investors Forum. We conducted a forensic audit which confirmed that prima facie, an offence had been committed, after which we registered a complaint on Monday,” said Joint Commissioner of Police (Crime) Himanshu Roy.
The complaint has been registered under various sections of the Indian Penal Code, and states that the accused hatched a criminal conspiracy, created forged documents and falsified accounts to cheat more than 13,000 investors.
The complaint names as accused FTIL chairman Jignesh Shah, MCX Stock Exchange MD Joseph Massy, former NSEL MD Anjani Sinha among others, and 25 borrowing companies, trading members and brokers.
“A total of 63 teams have visited 35 locations in Maharashtra, 18 locations in Delhi, five in Rajasthan, 15 in Chandigarh and Mohali, and other locations in Punjab, Haryana, Madhya Pradesh and several other states,” said Roy.
According to an NSEL statement, EOW officials initiated searches on the 24 borrowers’ premises across the country.
The basic premise of the EOW’s case is that the NSEL, being a commodities exchange, was supposed to back all trades conducted through it by physical goods in its warehouses, which was not done, and all transactions were only on paper. Bogus warehouse receipts were allegedly issued to back up the bogus transactions, leading to a loss of Rs 5,600 crore to investors.
MCA expects reports in few weeks
The ministry of corporate affairs is likely to take action in the NSEL case soon on the basis of the interim report submitted by the registrar of companies (RoC) Mumbai, while it awaits the probe report on the related entities of the National Stock Exchange Ltd (NSEL).