FIR may stay even if NSEL scam accused, investors strike a deal

MUMBAI: A settlement between the promoter of or defaulting borrowers on NSEL, on the one hand, and aggrieved investors, on the other, may not lead to charges being withdrawn against the accused.

Any financial settlement does not guarantee the quashing of the first information report (FIR) filed by the Mumbai police against these parties, said a top Mumbai police official investigating the 5,500-crore scam.

"Only the High Court or Supreme Court can quash an FIR, and either can make such a decision after seeking our opinion," said Rajvardhan, additional commissioner of police, Economic Offences Wing (EOW), Mumbai police. "Any deal between FT or the defaulting borrowers and NSEL investors does not mean the FIR will be quashed ... I think you should be very clear in your minds about this point," he told mediapersons a day after NSEL Investors Forum said the fate of a likely settlement with promoter FT could be known by this weekend or early next week.

A broker who plays a key role in the forum said the withdrawal of FT's name from the FIR would be a given in any possible agreement between investors and the company. "Normally, we have seen FIRs being quashed by courts in cases between two persons fighting among themselves and they reach a settlement ... not in cases where large public interest is involved. In this case, there are 13,000 investors on one side and two PSUs. What about them?" he asked referring to MMTC and PEC.

"It should not be taken for granted that in case a settlement is reached the FIR is quashed. A simple analogy is if a robber returns all the goods after being caught the criminality cannot be wished away. So, the FIR, in this case, is only the process of setting in motion criminal law. It is not an end in itself...and we are guided only by law and larger public interest," explained Rajvardhan.

In a continuation of the investigation, the CFO of Adani Wilmar appeared before the Mumbai police which will look into the books of the equal joint venture between Adani Wilmar and NK Proteins, said Rajvardhan.

Part of the 960-odd crore that NK allegedly owes investors was pumped into this JV which has shown large losses, according to investors, despite being created recently. Another borrower, PD Agro, returned 11 crore to NSEL for repayment to the investors and the Bombay HC rejected an appeal of investors for extension of remand of Arun Kumar Sharma of Lotus Refineries, saying that borrowers had no right to appeal for remand of an accused, added Rajvardhan.
Courtesy:
ET Bureau Nov 23, 2013, 08.04PM IST
http://articles.economictimes.indiatimes.com/2013-11-23/news/44389969_1_nsel-investors-forum-nsel-scam-mumbai-police