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NSEL urges EOW to recover money from 22 defaulters

The board of directors from the spot exchange asked the Economic Offences Wing (EOW) to start selling the property worth Rs 5,000 crore the latter attached, in order to pay investors their money back

The Board of directors of the scam-embroiled National Spot Exchange Limited (NSEL) met the Economic Offences Wing last week, to request the latter to start recovering money from the defaulting companies.

NSEL CEO Jignesh Shah
NSEL CEO Jignesh Shah

The recovered money up to Rs 5,500 crore would be paid to investors. The EOW has attached properties of the defaulters worth Rs 5,000 crore, but none of them have been sold.

Saji Cherrian, managing director and chairman of NSEL, said, “We had a meeting with the head of EOW and discussed every defaulter in detail. We want to recover money from the defaulters and hand it to the investors.”

NSEL authorities fear the promoters – some of whom have been travelling abroad despite there being lookout notices against them – may escape and it would be difficult to recover the money then.

Foreign trips
Exchange directors provided EOW with proof of their claims. According to an NSEL official, the documents submitted showed Rajan Chopra, of Mohan India, who has defaulted on hundreds of crores, enjoying on a cruise with his family.

Balbeer Singh Uppal visited Dubai to attend a function of setting up a basmati processing unit. In February, Surendra Gupta of P D Agro had sought to go to Italy. These documents have been submitted to the court as well.

An official from NSEL said, “We have provided all documents on the defaulters and their dues, to the EOW, but they need to recover from them. Till today, only 2 defaulters have paid their dues. A few have committed to pay, but the rest are having a good time, despite there being lookout notices against them.”

He added, “Investors want the money to be recovered from defaulters, but there is no attempt being made to recover the money by auctioning their seized assets, which are over R3,500 crore, as per EOW records.”

The NSEL fraud is worth Rs 5,600 crore, promoted by Financial Technologies India Ltd (FTIL). Its CEO Jignesh Shah is now in jail for the scam.

Speaking to mid-day, an EOW official said, “NSEL has been facing problems in settling dues worth R5,600 crore of 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on government’s direction.

An FIR was filed in October 2013 by EOW against Shah, Joseph Massey (MD of MCX, another FTIL-promoted firm), other promoters, directors and defaulters, charging them with cheating, forgery, breach of trust and criminal conspiracy, among others.”

'Release Shah for money recovery'
In the sessions court hearing yesterday, the intervener in the case produced a set of emails sent by the former NSEL chief, accused Anjani Sinha, to Jignesh Shah and Director Shreekant Javelgekar, saying these mails prove that Shah was aware of the whole fraud.

In one of produced emails, Sinha declares that NSEL have received money towards advance payment from N K Protein, one of the defaulters. However, according to NSEL, there is no incriminating evidence to show that Shah was involved in the scam. Instead, NSEL asked the court to provide bail to Shah, so he may help recover the investors’ money.

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