THE MUMBAI Police on Thursday submitted a supplementary chargesheet in the alleged Rs 5,600 crore NSEL scam against 27 people and 36 companies, including the commodities spot exchange National Spot Exchange Limited (NSEL) and its senior officials.
Coming four years after the first set of chargesheets were filed against seven accused, including then NSEL director Jignesh Shah, the 28,000-page supplementary chargesheet relies on three forensic audit reports that the Economic Offences Wing (EOW) claims found illegalities on part of the companies charged in the scam. The Mumbai EOW that has in all charged 70 accused, is still investigating the case and is likely to file more chargesheets.
In 2013, Jignesh Shah had been booked by the Mumbai Police on allegations of defrauding investors by inducing them to trade on the platform of NSEL and by creating forged documents. The EOW case alleges the NSEL scam to be worth Rs 5,600 crore, involving around 13,000 investors. Based on the EOW investigation, the ED had also registered a case against key officials of NSEL and its promoter Financial Technologies India Limited (FTIL), which holds 99.99 per cent shares of NSEL. Shah was FTIL’s chairman and MD with overall control of both FTIL and NSEL.
A senior police officer said that the 27 people chargesheeted include some former top office-bearers of NSEL, including Shreekant Javalgekar. The chargesheet also included documentary evidence of over 22 GB data pertaining to the accused companies and individuals. “Apart from NSEL, those charged include the companies that produced forged receipts claiming that they had agricultural produce in their godowns that was being traded on the commodities exchange. The probe has revealed that these commodities were only on paper and no actual goods existed in these godowns,” the officer said.
The police alleged that NSEL was the mastermind behind the offence, as the conspiracy of the fraudulent transactions began at the company and defaulter companies and brokers were roped in. The officer said that NSEL had provided the platform for the alleged fraudulent trade to be carried out.
The officer added that the government-appointed audit reports that form the crux of the evidence, included documents like minutes of the board meetings of these companies that claimed presence of commodities in the godowns while in fact, there were no such goods present there. It also included warehouse receipts, membership forms, hard disks and other information from servers. A report by a digital forensic auditor has also helped establish the communication trail like the email exchanges, the officer said.
Besides, three brokers who were responsible for getting investors have also been charged. “They misled investors by claiming to give a fixed interest, which could not have been done since it was a market-driven trade and profits could not be fixed,” the officer said.
The EOW has sought assistance of market regulator Securities and Exchange Board of India for information on the three brokers, who were registered with SEBI. All the accused chargesheeted in the case, including the seven who were charged in 2014, are currently out on bail.
The NSEL, in a statement, said: “The National Spot Exchange Limited (NSEL) compliments the Economic Offences Wing of Mumbai Police (EOW-Mumbai) for filing the chargesheet in the matter involving counter party defaults at NSEL platform in August 2013. In fact, in August 2018, the Exchange has filed writ petition no. 3416 of 2018 in Honorable Bombay High Court praying that the final charge sheet in the matter be filed at the earliest, in the interest of truth and justice… We request the EOW-Mumbai to file the final charge sheet in the matter as early as possible so that trial can commence and the real culprits are brought to the book.”