The economic offences wing (EOW) of Mumbai police has filed its 11th and a final charge-sheet in the Rs5600 crore National Spot Exchange Limited (NSEL) fraud case, says a report from Economic Times
Pravin Padwal, joint commissioner of police (EOW), told the newspaper that "We have submitted charge-sheets against the promoters of NSEL, defaulter borrowers, and brokers who indulged in the inducement of investors and modification of trade. This was a very lengthy probe and even now, the process of attachment of properties, making the properties absolute, and the auction is going on. Once all investors get 100% refunds, and all the accused are convicted, that will be a credible achievement for EOW."
The final charge-sheet was filed in the special court by investigating officer Prakash Bagal. Till date, 220 accused, including companies, brokers, defaulters and chartered accountants (CAs), have been charge-sheeted for their role in alleged cheating, forgery, inducement for cheating and criminal conspiracy, the report says.
Earlier in October, the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act (MPID) court has directed the competent authority (CA) to make a graded distribution only to about 2,040 individual traders who have outstanding amounts between Rs10 lakh and Rs20 lakh. The court, however, excluded corporates and partnerships from getting preferential payment. (Read: NSEL: MPID Court Asks To Pay Small Traders up to Rs20 Lakh, Excludes Corporates
Earlier in May, the Supreme Court approved the constitution of a high-powered committee headed by a retired judge of the Bombay High Court, Pradeep Nandrajog, for recovery of monies from the defaulters where NSEL has secured money decrees.
Notably, NSEL has single-handedly secured decrees/arbitration awards worth Rs3,534.46 crore against NSEL defaulters. Further, an amount of Rs760.31 crore worth of defaulters' liabilities has already been crystallised by the high-powered committee appointed by the Bombay High Court, which, NSEL is confident, will soon culminate into a decree. (Read: NSEL: SC Appoints High-powered Committee To Execute Decrees against Defaulters
In June 2022, the securities appellate tribunal (SAT) directed the Securities and Exchange Board of India (SEBI) to conduct an independent inquiry within six months against five brokers —Motilal Oswal Commodities Broker Pvt Ltd, Anand Rathi Commodities Ltd, IIFL Commodities Ltd, Philip Commodities India Pvt Ltd, and Geofin Comtrade Ltd—and probe their role in the Rs5,600-crore NSEL payment default crisis. (Read: NSEL: SAT Asks SEBI To Conduct Fresh Probe of 5 Brokers, Associated Persons within 6 Months)
Immediately after the payment crisis in August 2013, NSEL took a without prejudice loan of Rs179 crore from 63 moons technologies limited. This loan was used to repay traders having claims of up to Rs2 lakh in entirety and those with claims between Rs2 lakh and Rs10 lakh by up to 50%, a statement from NSEL had said.
Last year in March, the Bombay High Court had asked the CA to distribute the amount lying in its escrow account to genuine claimants whose outstanding are between Rs2 lakh and Rs10 lakh on a priority basis.
Earlier in 2013, the economic offences wing (EOW) of Mumbai police registered a first information report (FIR) in the NSEL fraud. Based on the FIR, the enforcement directorate (ED) initiated a money laundering investigation against directors and key officials of NSEL, 25 defaulters of NSEL and others.
The investigation conducted by ED under PMLA (Prevention of Money Laundering Act) revealed that the money collected from various investors was diverted by borrowers and trading members of NSEL for other activities like investment in real estate and repayment of outstanding debts.