NSEL scam: Lotus Refineries chief sent in police custody

MUMBAI: An arrested borrower of the NSEL was today remanded in police custody for four days by a local court which accepted Mumbai Police's plea to interrogate him to unearth "the larger conspiracy" behind the scam at the crippled spot exchange.

Arun Sharma, Chairman of Lotus Refineries who is also a film financier, was arrested by Economic Offences Wing (EOW) yesterday, becoming the fifth person to land behind bars in the payment crisis at National Spot Exchange Ltd (NSEL).

"Sharma was produced before a Court which remanded him in police custody till November 16 for further investigation," said Additional Police Commissioner (EOW) Rajvardhan Sinha.

The EOW told the Court it needs to unearth "the larger conspiracy" behind the scam and for this purpose, Sharma's interrogation was required. Subsequently, Sharma, who produced just-released film `Satya 2', was sent in police custody.

EOW had earlier arrested four persons -- Anjani Sinha, former CEO of NSEL; Nilesh Patel, Managing Director of NK Proteins (a defaulting firm), and Amit Mukherjee and Jay Bahukhundi (both mid-level executives of the bourse) in connection with the Rs 5,600-crore payment default.

Sharma, who had borrowed Rs 159 crore from NSEL and did not make any payments, had splurged the money on real estate, decorating his office among others, police said, adding his outstanding dues now stood at Rs 252.56 crore.

According to police, Sharma's intention was very clear - to splurge the borrowed money on non-productive activities. "He spent about Rs 38 crore to buy an office in Worli (central Mumbai) and another Rs 1 crore on furniture. He invested a few crores of rupees in making `Satya 2'," said another officer.

Meanwhile, investigators are scrutinising accounts of Mohan India, one of the biggest NSEL borrowers, police said.

EOW is continuously sending property attachment notices under the Maharashtra Protection of Interest of Depositors Act to the accused named in the FIR, they said.

EOW has invoked the stringent Act in the case, which empowers them to attach immovable assets of the accused. Some of the largest borrowers of NSEL include Mohan India, NK Proteins, Laxmi Group, MSR Food Processing and Swastik Group.

An FIR was registered on September 30 by EOW against top NSEL executives (including promoter Jignesh Shah). They have been charged with cheating, forgery, breach of trust and criminal conspiracy, among others.
Courtesy:
PTI Nov 12, 2013, 11.06PM IST
http://articles.economictimes.indiatimes.com/2013-11-12/news/43980991_1_nsel-scam-anjani-sinha-jay-bahukhundi