Trading activity at the scam-hit NSEL was just being done on “paper” by accused firms as they allegedly laundered genuine investor funds to not only purchase costly properties but also for advertising expenses and settling personal loans, according to the ED.
A money laundering investigation report prepared by Enforcement Directorate (ED) into the alleged financial irregularities of National Spot Exchange Limited (NSEL) found that the modus operandi to perpetrate the scam, as exhibited by one of the prime accused in the Rs 5,600—crore payment crisis, was to allegedly generate bogus sale transactions from the bourse and transfer the tainted funds to purchase various assets by way of banking funds transfer channel like cheques, NEFT/RTGS payments and pay orders.
The agency also recorded the statement of a director of a defaulting firm— NK Proteins Limited— where he has stated that they were “generating funds from NSEL without having any physical stock of castor seeds, castor oil, and wash cotton seed oil“.
“The director admitted that the funds received from NSEL through bogus sale transactions were channelised and integrated with their business activities and then invested in real estate and that they had not delivered any physical stock goods to NSEL godown and that the trades were just paper transactions,” the report, accessed by PTI, said.
The agency said its probe which included scrutiny of bank statements, relevant documents and deposition of various people including from the accused firm “indicate that after receiving the said funds, the same have been diverted and placed and integrated for procurement of real estate and land.
“The payments were made from the settlement account (of NSEL) by way of transfers, cheques, NEFT/RTGS payments or pay orders for ultimate procurement of properties.”
The report said as per NSEL records, the net total liability of this accused firm stood at Rs 330.81 crore.
The accused firm, however, said in its submission that non-delivery of physical goods between two contracting entities “cannot be a ground” for initiating criminal proceedings of money laundering against them, a statement rejected by the PMLA Adjudicating Authority in its review of ED’s action taken report.