Investors and brokers of the National Spot Exchange Ltd (NSEL) have formally approached the Economic Offences Wing of the Mumbai Police against the exchange.
The bourse, promoted by Financial Technologies (India) Ltd, is facing the problem of settling Rs 5,500-crore dues to members and brokers, representing 13,000 investor clients, after it suspended trade on July 31 on government’s direction.
Around 58 investors and 17 brokers/ members of the NSEL on Wednesday filed a criminal complaint with the EOW against NSEL, promoter Jignesh Shah, the NSEL board and executives including Amit Mukherjee and Jai Bhaukhundi, auditor Mukesh Shah, 24 defaulters and their clients.
Earlier, questions were raised by investigating agencies about the delay in filing a complaint by the investors who have lost money. Anjani Sinha, who was recently sacked as MD, had also admitted about the fraud going on in the exchange. When asked about the delay in taking legal action, an official of the NSEL Investors Forum had recently told this paper that they were in talks with the NSEL management for payment and any legal recourse would delay the payment process for several years.
The complaint has alleged that “Jignesh Shah is the brain, trust and alter ego of NSEL and primarily responsible for the affairs and the fiasco at NSEL and that he abused his position to create a false impression in the minds of investors regarding the legitimacy of the operations at NSEL”.
According to the complaint, 99 per cent of the delivery business is a fraud, evidenced by complete absence of underlying goods and issuance of fake warehouse receipts. The complaint alleged that “NSEL built its business model around trading in “non existent” goods and giving investors an impression that goods were in warehouses, when none existed and produces several documents supporting the active marketing done by Jignesh Shah”. It also alleged cozy relationships between the defaulters, promoters and management wherein goods were stored in premises of the defaulters, which did not have storage capacity for stated quantities.
Panel of secretaries to meet on Friday
New Delhi: A panel of secretaries, headed by economic affairs secretary Arvind Mayaram,