NSEL scam: Enforcement Directorate attaches spinning mill plant in Andhra Pradesh

Aug 21 2014, 23:25 IST
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SummaryThis attachment of the asset, under the Prevention of Money Laundering Act (PMLA), is a rare case where the agency has seized and enforced its orders on an entire mill premises.

The Enforcement Directorate (ED) today attached a spinning mill plant worth Rs 84 crore in Andhra Pradesh in connection with its money laundering probe in the National Spot Exchange Limited (NSEL).

The plant is located in Guntur district of the state and is registered under the name of Ms Spincot Textiles, an official order by the agency said.

The estimated value of the plant is Rs 83.71 crore, the order said.

This attachment of the asset, under the Prevention of Money Laundering Act (PMLA), is a rare case where the agency has seized and enforced its orders on an entire mill premises.

"The attachment is part of the agency's probe against defaulting firms involved in the NSEL scam," sources said.

The central probe agency's Mumbai unit had registered a criminal FIR in this case in October last year to probe money laundering instances in the Rs 5,600-crore scam.

It has so far attached assets to the tune of over Rs 500 crore of the defaulting firms and is conducting a parallel probe in this case alongside the Mumbai police and other agencies.

NSEL's payment troubles started after it was ordered by regulator Forward Markets Commission (FMC) in July last year to suspend spot trade in most of its contracts due to suspected trading violations.

The exchange could not settle the outstanding trades, sparking investigations by the police and regulators to find out whether the exchange had defrauded traders by not enforcing rules requiring sufficient collateral to be set aside.

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