Nearly five years after the Enforcement Directorate (ED) started a money laundering probe in connection with the National Spot Exchange Private Limited (NSEL) fraud, the agency claimed that NSEL and its erstwhile parent company, Financial Technologies Limited (FTIL), laundered Rs1,254.08 crore.
Last month, ED filed a supplementary complaint under the Prevention of Money Laundering Act (PMLA), focusing on the role of FTIL, NSEL, Jignesh Shah, Indian Bullion Market Association (IBMA) and Anjani Sinha, executive director of IBMA. The court, however, is yet to take cognisance of the complaint.
The agency claimed that NSEL had earned an income of Rs1,112.03 crore from 2008-09 to 2013-14, which the agency claimed was proceeds of crime. The agency also said NSEL had a separate fund under the head of ‘Settlement Guarantee Fund’ of Rs236.05 crore, which was meant to safeguard the interest of trading members. However, the funds were allegedly used to repay the overdraft facility of a private sector bank. ED has included the ‘Settlement Guarantee Fund’ into the proceeds of crime.
According to the fresh complaint, the agency claimed that NSEL was acting as a platform controlled by FTIL — now renamed as 63 Moons Technologies Ltd. Shah was a chairman and executive director of FTIL, and promoter director and vice-chairman of NSEL.
The agency claimed that NSEL failed in its duties to function as a commodity exchange and instead was run as a financial exchange. “FTIL has incorporated and operated NSEL as financial exchange with the sole aim of maximising profits. FTIL has been actually involved with possession, acquisition and use of proceeds of crime,” ED claimed in its complaint.
The agency claimed that the paired contracts were launched by NSEL without ascertaining facts, and trade was carried out without the physical existence of goods. “In fact, the NSEL executives… submitted bogus stock offer letters claiming that equivalent stocks have been delivered to the NSEL designated warehouses. Huge funds were channelled to the defaulting entities without any semblance of goods,” ED claimed in its complaint.
The agency said IBMA, a subsidiary of NSEL, had facilitated the laundering of the proceeds of crime earned through NSEL. “IBMA acquired proceeds of crime from members/defaulters of NSEL under the guise of fake invoices prepared in the name of trading of various commodities and also in the name of consultancy charges. Thus, IBMA has been actually involved with possession, acquisition and use of proceeds of crime, and projected the same as untainted,” ED claimed.
ED said IBMA had availed a loan of Rs165.30 crore in 2011-12 and Rs882.25 crore in 2012-13 from NSEL. It is also stated that IBMA had received Rs20 crore from LOIL group of companies towards consultancy charges in 2012-13. LOIL group of companies have been made accused by ED. ED also claimed IBMA had received Rs10 crore from Mohan Infracon Pvt Ltd, one of the defaulters of NSEL.
First Published: Aug 07, 2018 00:36 IST
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