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NSEL defaulters used dummy accounts: I-T dept

Sep 02 2013, 09:42 IST
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SummaryI-T is probing whether amounts invested were declared in annual returns of concerned parties.

The income tax (I-T) department has found that at least one of the big defaulters on National Spot Exchange Limited (NSEL) was using dummy bank accounts, suggesting the matter may be more than just a simple payments default. The I-T department is investigating whether the amounts invested were declared in the annual returns of the concerned parties.

The I-T department, that has submitted an initial report on NSEL, has said the money received by members “has been utilised for investment in real estate, etc”. Typically, while party A received a payment upfront and had an 11-day period to make good the delivery, the money was invested in real estate. The I-T department report says one of the persons associated with the bank account through which the transaction took place has denied any association with either the bank account or the transactions. “He appears to be a dummy person,” the report says.

NSEL officials, when asked whether they were aware of such diversion of funds, told FE they could not comment on the business transactions of its members, and that relevant authorities would take the necessary action in case anything wrong had been done.

With the payment crisis deepening at NSEL, the government set up a panel under economic affairs secretary Arvind Mayaram last week — the panel has representatives from all the concerned departments, regulators and investigating agencies, to look into the violations.

Meanwhile, ministry of company affairs is also asking for reports on the trading and transactions through a detailed questionnaire from the Forward Markets Commission (FMC) and NSEL for further investigation. The ministry has also asked FMC to provide information about earlier income tax survey reports, audit report submitted by the stock verification agencies, and details of all correspondences on availability of stocks at NSEL. The ministry is also asking for detailed stock reports from the NSEL to identify the stocks not delivered by the sellers to the accredited warehouses. It is also seeking all other relevant information to identify fictitious transaction and mismatches between trade and stock, and also details of the warehouses.

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