Investors and brokers, allegedly trapped in the National Spot Exchange Ltd (NSEL) payment crisis, have filed a criminal complaint against its vice-chairman Jignesh Shah and others with the Economic Offences Wing of Mumbai Police.
This is even as the Government-appointed special committee of secretaries, headed by Economic Affairs Secretary Arvind Mayaram, is slated to meet again on Friday to finalise its report on the issue.
The commodity spot exchange is facing problems in settling the Rs 5,600-crore dues to 148 members/brokers, representing 13,000 investor clients, after it suspended trade on July 31 on the Government’s direction.
The investor forum, in a statement, said that 58 investors and 17 brokers/members of NSEL had filed a criminal complaint against NSEL, Shah, the board of directors and executives, including Amit Mukherjee and Jai Bhaukhundi, auditor Mukesh Shah and 24 defaulters and their clients
The forum, in its complaint, said that Shah was ‘the brain, trust and alter ego’ of NSEL and was primarily responsible for the affairs and the fiasco at NSEL. The complaint alleges that 99 per cent of delivery business is a fraud, evidenced by complete absence of underlying goods and issuance of fake warehouse receipts.
It said that NSEL built its business model around trading in “non-existent” goods and giving investors an impression that goods were in warehouses, when none existed and produces several documents supporting the active marketing done by Shah. It also alleged a ‘cosy relationship’ among the defaulters, promoters and management wherein goods were stored in the premises of the defaulters, which did not have storage capacity for the stated quantities.