NSEL Investors Allege EOW Soft On Borrowers In Rs 5,600 Crore Scam

The investors of Rs 5,600 crore NSEL scam have alleged that the agencies involved in the investigation of the fraud have a lackadaisical approach, and have been soft on borrowers. In a letter to the commissioner of Mumbai Police, the investors have pointed out various loopholes in the investigation carried by the economic offence wing (EOW), the investigating agency in the case.

“Investors in the last 8-10 months have only got back 1% though Himanshu Roy, Ex-joint commissioner of Police (Crime), in a public meeting about 10 months had promised that NSEL investors by Diwali would get all their money back with interest. Shockingly, there are several lacunas and shortcomings in the investigation which is hurting the investors,” said Ketan Shah, an investor and a member of NSEL Investors’ Action Group , an association of 13,000 investors hit by the scam.

He further alleged that EOW has not yet summoned Darshan Baldevbhai Patel, the largest borrower who has taken Rs 419.30 crore from NSEL under NK Protein Ltd account, for a statement, nor have they confiscated his bank accounts even after over a year of the scam.

“Forensic audit of all borrowers’ books is not complete and borrowers are dictating on how and when the audit should take place. Also, money trail has not been established even after 15 months and all accounts where NSEL funds reached, have not yet been frozen”, stated Shah in the letter dated October 28, 2014.

Investors further noted that the group bank accounts for ‘quid pro quo’ financial favours have not been checked by the EOW. “…there is a strong belief that NK Proteins Ltd has taken money in one account but have sent the money abroad through their other business accounts and the same money has come back as FII investments in FTIL,” alleged Shah.

He has also claimed that Hawala dealings were found where money was sent overseas by the borrowers (ARK Imports had allegedly sent nearly Rs 100 crore to the overseas), but EOW did not share the names of the beneficiaries with Enforcement Directorate (ED), who have the jurisdiction to investigate into such dealings.

“…the EOW has not even filed a contempt petition in courts even where the repayment schedule agreed by borrowers is not met. The agency has not yet arrested Shilpa Agarwal, director of Aastha Minment (one of the borrowers of NSEL), even though they have failed to pay as committed. Nor has the agency made any arrest in the case of Balbir Uppal, promoter of LOIL Group, who claims to have close political connections,” averred Shah in the letter.

The investors have also addressed the letter to the Prime Minister’s Office, Finance Minister Arun Jaitley, ED Delhi, Central Bureau of Investigation (CBI), Home Minister of Maharashtra and ED Mumbai.