NSEL scam: Court orders EOW to probe ex-FMC chairman

MUMBAI: A special court hearing the cases registered against the National Spot Exchange Limited (NSEL) on Friday ordered the Economic Offences Wing of the Mumbai police to probe the role of former chairman of Forward Markets Commission (FMC), Ramesh Abhishek, in an alleged fraud and submit a report within 40 days.

The NSEL had approached the special court to direct the EOW to probe the role of the FMC in the alleged fraud. In its plea, the NSEL had contended that Abhishek, who was the FMC chairman between September 2012 and September 2015, was actively involved in all decisions taken related to the NSEL.

It was claimed that Abhishek initiated action only against the NSEL, its parent company FTIL and non-executive directors, but failed to act against defaulters and brokers. Besides, it was alleged that the former FMC chairman proposed to merge NSEL with FTIL to benefit defaulters and brokers.

Objecting to the plea, the prosecution said that the applicant itself was the prime accused in the case and therefore, did not have the locus standi (legal right) to file the application. According to the prosecution, others cannot be held responsible for the act of the applicant.

The NSEL contended that the members of the commission had held close-door meetings with defaulters and what was discussed is not known to anyone.

The court, set up under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act (MPID), observed that considering the contentions of the NSEL, “there appear some suspicious acts and omissions on the part of the then FMC chairman. Whatever the suspicious acts and omissions highlighted by the applicant, by way of this application, in my considered opinion required to be investigated by way of further investigation.”

“No prejudice or harm will be caused to the prosecution, if the matter is investigated by considering the above facts. On the contrary, truth will come out which will be helpful to decide criminal liability of the actual culprits,” the court added.

The NSEL case, which came to light in 2013, involves settlement crisis and payment default of ₹5,574 crore that led to losses for 13,000 investors. It pertains to the hatching of a criminal conspiracy to defraud investors, inducing them to trade on the platform of NSEL, creating forged documents like bogus warehouse receipts, falsified accounts and thus committing a criminal breach of trust.