Mumbai: NSEL scam investors will soon be refunded

The 15,000 investors who were cheated in the National Spot Exchange Ltd (NSEL) scam will soon get refunds, as the state Home department has decided to liquidate properties worth R6,500 crore owned by the defaulters. The money collected through the auctions of the properties will be used to settle claims of the investors.

MCX promoter Jignesh Shah is among the defaulters in the NSEL scam. File pic
MCX promoter Jignesh Shah is among the defaulters in the NSEL scam. File pic

Ranjeet Patil, minister of state for Home (urban), told mid-day on Thursday that his department has short-listed four private consultants for facilitating auctions and settlement of claims. “The Economic Offences Wing (EOW) of Mumbai Police and revenue officials will not have resources and expertise to accomplish the huge task.

The private consultants will do it for the government,” he said. The minister did not name the consultants — two Indian companies and two international firms — who gave power-point presentations to him on Thursday at Mantralaya. According to Patil, the properties were attached under the Maharashtra Protection of Interests of Depositors (MPID) Act by the EOW.

The worth of properties seized is more than the claims value (R5,600 cr) he said, adding that auctions of the properties would happen soon. Among the Ponzi operators who defaulted, are MCX promoter Jignesh Shah and other NSEL officials. Their attached properties are scattered across the country.

Patil had invited 18 deputy collectors who are authorised to act under MPID Maharashtra, the chief minister had announced. Shah, also promoter of Financial Technologies India Ltd and others, faces police action in the case. In October 2013, the EOW carried out perhaps its biggest operation 200 officers spread out across 17 cities and raided properties in 180 locations on just one day.

In August this year, EOW filed a 9,360-page charge-sheet before the MPID court against NSEL promoter Shah for his alleged role in the scam. EOW sources said the Maharashtra Revenue Department will now issue a notification, starting the process of liquidating attached properties.

NSEL Scam
Thousands of investors were lured into trading on the NSEL with the promise of an assured return of anywhere between 15% and 18% per annum. NSEL facilitated commodity producers to find buyers for their products. Operating smoothly in the initial stages, payment cycles were changed by the promoters.

The buying and the selling of commodities like steel, paddy, sugar, ferrochrome, etc., was conducted only on paper. The promoters used the money to buy properties across India. Investors then stopped getting returns. The police started action in 2013.

Other scams
Minister Patil told mid-day that the Union government had agreed to route R200 cr that was seized by the state EOW from various fraudsters who created different schemes. The money will be used for settling claims of investors who have complained to the police. The amount was taken in possession by the Central investigating agencies, after they were handed over the probe that was started initially by the state police.

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