Mumbai: The Economic Offences Wing (EOW) of Mumbai police on Monday said that it has attached at least 166 properties of the defaulting borrowers of the National Spot Exchange Ltd (NSEL ) which is involved in a payment crisis of Rs.5,574.35 crore.
Rajvardhan Sinha, additional commissioner of police (EOW), said the investigating agency has gathered new evidence of diversion of money in the NSEL crisis.
According to EOW, Anjani Sinha, the former chief executive officer and managing director of the commodity spot exchange, Amit Mukherjee, a former assistant vice-president of business development and his subordinate Maneesh Pandey have invested at least Rs.34 crore in a real estate venture started by an official of one of defaulting borrowers of NSEL.
“Sinha, Mukherjee and Pandey have invested Rs.34 crore in Prime Zone Developers Pvt. Ltd, a Karnal-based real estate company run by Ranjeev Agarwal, a former chief financial officer of PD Agro Processors Pvt. Ltd,” said Sinha on Monday.
Sinha and Mukherjee are currently in judicial custody of EOW.
PD Agro Processors is one of the top borrowers of NSEL and owes Rs.644.55 crore to the commodity spot exchange.
“We are trying to find out if these investment in Prime Zone Developers were made at the behest of Anjani Sinha,” said Rajvardhan Sinha.
Besides, Prime Zone Developers has received at least Rs.10 crore from Mohan India Pvt. Ltd and Rs.4 crore from Swastik Overseas Corp.
Mohan India owes around Rs.922 crore while Swastik Overseas has to pay Rs.94.6 crore to NSEL.
“We have found that another Rs.150 crore has been invested in Prime Zone Developers and we are trying to find if any of the other borrowers of NSEL have invested this money,” said Sinha.
The settlement crisis at NSEL came to light on 31 July when it abruptly suspended trading in all but its e-series contracts. These, too, were suspended a week later. The closure of trading may have been prompted by an instruction from the ministry of consumer affairs to the exchange asking it not to offer futures contracts. A spot exchange isn’t supposed to do so, but the National Spot Exchange was doing that.
It tried to implement the change but because its appeal was to investors and members who were not interested in spot trades, it eventually had to suspend all trading. It later emerged that all trading on the spot exchange happened in paired contracts, with investors, through brokers, buying a spot contract and selling a futures one for the same commodity.
The entities selling on spot and buying futures were planters or processors and members of the exchange. It turned out there were only 24 of them, and they used the paired contracts as a way to raise easy money.
When the trading was suspended, the investors were left holding contracts that the members couldn’t buy because they didn’t have the money to do so.
On 14 August, the exchange proposed a payout plan, but it has been unable to stick to the schedule.
First Published: Mon, Nov 18 2013. 09 11 PM IST