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The investors of Rs 5,600 crore <keyword id="1888912" type="UNKNOWN" weightage="20" keywordseo="NSEL-scam">NSEL scam</keyword> 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 (<keyword id="56577" type="ORGANIZATION" weightage="20" keywordseo="EOW">EOW</keyword>), 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 <keyword id="1835667" type="UNKNOWN" weightage="20" keywordseo="NK-Proteins">NK Proteins</keyword> 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.

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

The anguished investors of the Rs 5,600 crore National Spot Exchange Limited (<keyword id="6405757" type="COMPANY" weightage="20" keywordseo="NSEL">NSEL</keyword>) scam have asked the authorities to take action against the remaining directors of Jignesh Shah-led Financial Technologies India Limited (<keyword id="6405755" type="ORGANIZATION" weightage="20" keywordseo="FTIL">FTIL</keyword>) as well as Indian Bullions Market Association (IBMA), the apex body for Indian bullion trade and industry. “Though <keyword id="154840" type="PERSON" weightage="20" keywordseo="Jignesh-Shah">Jignesh Shah</keyword> and Shreekant Javalgekar have been arrested, other directors of FTIL including Ravi and Bharat Seth are not even touched or even interrogated. It is noteworthy that all directors of FTIL and NSEL have been accused in the FIR but neither arrested nor charge-sheeted so far. Directors of NSEL including Shankarlal Guru (whose son-in-law Nilesh Patel’s company NK Proteins was the biggest borrower), BD Pawar, Sunil Daga Khairnar who received bogus donations of about Rs 17 crores from MCX not yet investigated or arrested,” alleged NSEL Investors’ Action Group, an association of the investors hit by the NSEL scam in a letter to the Commissioner of Police of Mumbai, Crawford Market. 
	The body also added that despite their repeated complaints regarding the role of IBMA, as a money laundering vehicle and bogus trade worth Rs 500 crore per day on NSEL’s Eseries product line, no action has been taken by the authorities. “Money taken from NSEL defaulting borrowers like LOIL, Mohan India, PD Agro, has been fraudulently diverted into IBMA to make up for about Rs 65 crore losses it suffered on account of Jignesh Shah’s speculative trading losses on MCX. These losses were falsely parked in SNP Designs P Ltd,” alleged the investors in the letter dated October 9. 
	 

	Interestingly, Devang Neralla, who was the founder member of FTIL was also a director of the apex body for bullion trade but no action has been taken against him so far. 

	 
	On the other hand, the IBMA has stated that its settlement and client account has been frozen by HDFC bank. “This is to bring to your kind attention that due to a direction from Punjab Vat department, HDFC bank has freezed IBMA’s settlement and client account with the bank. Due to this, IBMA is unable to release the payout of Rs 98,78,775.94 received from NSEL for this week. We are speaking to the authorities and are hopeful of a solution in few weeks. Meanwhile we shall make arrangements for future pay outs to reach investors without any hurdle” the apex body issued a statement on its website. 
	 

	Apart from these allegations, the investors have suggested action against NSEL auditors Mukesh P Shah and SV Ghataliya. They have accused the auditors of being privy to the scam. 

	 
	“Auditor Mukesh P Shah (internal and statutory auditor for NSEL) was uncle of Jignesh Shah and was privy to the diversions of funds and NBFC like activities of NSEL. He was copied on various emails proving his knowledge and complicity in NSEL fraud. Auditor SV Ghataliya being statutory knew all about the scam and they are known to be also an auditor of some top defaulting borrowers companies in NSEL. Mukesh P Shah was also an auditor of MCX and recipient of bogus donations from the Exchange. Surprisingly, the assets of these auditors have not yet been frozen till date”. 
	 

	Talking about the lackadaisical approach in the matter, the investors expressed their disappointment over the lack of action against the top defaulters in NSEL. They allege that the defaulting members have been allowed to trade. 
	 

	“NK Proteins, the biggest borrower is conducting business with impunity and is also giving regular TV advertisements for his Tirupati brand oil in Gujarat at the cost of crores of rupees,” said the investors. 

	 
	The aggrieved investors also noted that not all bank accounts of defaulting borrowers have been frozen and these defaulters are have been doing their business as usual as there is no pressure on them to pay back. 
	 

	The association has also pointed out that despite several reminders being sent to the agencies, the crashed servers of NSEL and FTIL, which had data and information crucial to the investigation has not been reconstructed. 

	 
	The distressed investors have sent the four-page letter to the Joint Commisioner (Crime) of Mumbai Police and the additional commisioner of the Economic Offense Wing, Mumbai Police.

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

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NSEL Investors Want Action Against Brothers Ravi Sheth And Bharat Sheth

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