Till now the EOW has attached 100 properties belonging to the key management personnel and the borrowers of the commodities spot exchange. Out of these, at least 12 properties belong to N.K. Proteins Ltd, one of the biggest NSEL defaulters. Photo: Ramesh Pathania/Mint
Mumbai: The Economic Offences Wing (EOW) of the Mumbai police on Wednesday said it has recovered at least Rs.145.57 crore from the banks accounts that have been frozen in connection with the Rs.5,574.35 crore payment crisis at the National Spot Exchange Ltd (NSEL).
The investigating agency has identified 166 properties of the 24 NSEL borrowers who have defaulted in payments for attachment under the Maharashtra Protection of Interest of Depositors Act (MPID), EOW additional commissioner of police Rajvardhan Sinha said. “We are in the process of identifying more properties for attachment,” said Sinha.
Till now the EOW has attached 100 properties belonging to the key management personnel and the borrowers of the commodities spot exchange. Out of these, at least 12 properties belong to N.K. Proteins Ltd, one of the biggest NSEL defaulters.
The Gujarat-based firm owes about Rs.970 crore to NSEL. Its managing director Nilesh Patel was the first among the buyer members on NSEL to be arrested in connection with the crisis at the exchange. Patel is the son-in-law of NSEL’s former chairman Shankarlal Guru, who resigned from his post on 19 August.
The investigating agency has also attached three flats of Anjani Sinha, former chief executive officer and managing director of NSEL, and two flats each of Jai Bahukhandi and Amit Mukherjee, who were assistant vice-presidents of business development and warehousing.
On Wednesday, the EOW also questioned the directors of Mohan India Pvt. Ltd, LOIL Continental Foods Pvt. Ltd and LOIL Health Foods Pvt. Ltd.
Mohan India recently signed a pact with NSEL to pay Rs.771 crore over one year towards its settlement obligations.
In a related development, a Mumbai court on Wednesday extended the judicial custody of Anjani Sinha till 27 November. Sinha was arrested by the EOW on 17 October.
The settlement crisis at NSEL came to light on 31 July when the exchange 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 NSEL was doing that.
NSEL 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 NSEL 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, NSEL proposed a payout plan, but it has been unable to stick to the schedule.
Courtesy:
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