This Article is From Oct 08, 2013

NSEL crisis: Police writes to Registrars of Companies about 9 defaulters


The economic offence wing of Mumbai police was unable to find nine defaulters on the addresses they had furnished with beleaguered bourse National Spot Exchange Ltd (NSEL) in its ongoing probes into a crisis involving payment worth Rs 5,600 crore.

The investigators today wrote to the Registrars of Companies (RoC), highlighting the irregularities that led to the scam.

During nearly a week-long nationwide raids, the EOW officials discovered that nine of 27 companies that defaulted in making payments to NSEL did not exist at all, at least on given addresses, an official with the Economic Offence Wing (EOW) of the Mumbai Police told PTI.

Swastik Overseas Corporation, Loil Health Foods, Yathuri Associates, Ark Imports, Whitewater Foods are among the firms that could not be found at the addresses they had furnished to the NSEL, the official said.

"We have written to RoC today about irregularities in NSEL, other companies and non-existence of some firms that triggered the huge scam," the official informed.

Under Section 234, the RoC has powers to call for any information or explanation from a company.

Similarly, possessing the addresses of 62 warehouses, the police teams had reached to the 62 places during raids, only to find that 17 storages did not exist, 30 were empty while 15 others consisted of "negligible physical stock", according to the official.

EOW had last Monday filed an FIR against Jignesh 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 other charges.

Meanwhile, 12 directors of the NSEL, excluding Mr Shah and Mr Massey, have turned up to the EOW office for recording of the statement, the official added.

"Some have cited health reasons for not remaining present while others stated they would appear soon," the official added.

The spot commodity bourse, promoted by Jignesh Shah-led Financial Technologies, has been facing problems in settling Rs 5,600 crore dues of 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on government's direction.

The EOW so far has frozen 64 bank accounts, including those of the troubled exchange and the accused, even as CBI started a probe into alleged duping of customers and irregularities at the commodity exchange.