Mumbai: The Economic Offences Wing probing the Rs 5,600-crore cheating case involving the National Spot Exchange Limited and other companies made its first arrest on Wednesday, detaining Amit Mukherjee, former VP, business development, at the commodity exchange.
An EOW official said, “Mukherjee had received kickbacks from various companies.” Besides, he is said to have introduced new members, investors and clients to the NSEL, including firms that defaulted on payments.
NSEL promoter had blamed official for fraud
Mumbai: Even as the Economic Offences Wing (EOW) arrested Amit Mukherjee, former VP, business development, National Spot Exchange Limited, on Wednesday, Jignesh Shah and Joseph Massey resigned from the board of MCX-SX, another bourse run by the same group. Shah is one of the main promoters of Financial Technologies group that runs both NSEL and MCX-SX, while Massey is the MD of MCX-SX. Mukherjee will be produced before the Esplande court in Mumbai on Thursday.
Shah, during his questioning by the EOW, had reportedly put the blame on Mukherjee and Anjani Sinha, former MD & CEO of NSEL, for the multi-crore fraud at the bourse. Mukherjee, like many others, was summoned for questioning at the EOW’s Crawford market headquarters and later placed under arrest.
“We are questioning Mukherjee,” Rajvardhan Sinha, EOW additional commissioner of police, said. The EOW has so far questioned 20 people in the case, including Shah and directors Massey, Shreekant Javalgekar and Dewang Neralla. “Mukherjee had received kickbacks from various companies including, Mohan India, one of the largest borrowers at the exchange,” an EOW official said. “There will be many more arrests soon,” he added. Meanwhile, the Enforcement Directorate (ED) has also sought details of the NSEL fraud from the EOW. It suspects large-scale money laundering in the scam.
An FIR filed by investor Pankaj Saraf on September 30 had named Shah, Massey, auditor Mukesh Shah and others. All the accused have been booked for forgery, criminal breach of trust, cheating and criminal conspiracy. Saraf alleged that the NSEL had built its business model around trading in “non-existent’’ goods and giving investors an impression that goods were in warehouses, when none existed. Police have till date frozen 66 bank accounts belonging to various people, companies and the NSEL, having more than Rs 21 crore in these accounts. “During the raid, we found that 30 warehouses did not have any goods and were lying empty. Our raid is over and now we are busy scrutinizing the seized documents,” Sinha said.
On October 1, the CBI had started a preliminary enquiry (PE) into all aspects of the scam. The NSEL has been facing problems in settling Rs 5,600 crore in dues to 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on the government’s direction.
In a related development, market regulator Sebi has appointed Thomas Mathew T, a former top official with LIC, as the public interest director with MCX-SX, the stock trading platform of the Financial Technologies group and an associated entity of the NSEL. In a statement, MCXSX said as an interim arrangement, U Venkataraman, a whole-time director with the bourse, has been deputed to assist a special committee of public interest directors who will carry out the functions of the exchange
The Times of India, October 10, 2013