NSEL fraud: Mumbai Police wing seeks powers to attach properties of Shah, others

Asks for invocation of the Maharashtra Protection of Interest of Depositors Act, 1999

The Economic Offences Wing (EOW) of the city police has sought recommendations of the Mumbai and Mumbai Suburban district collectors for invocation of the provisions under the Maharashtra Protection of Interest of Depositors Act, 1999, (in financial establishment). The invocation, if it happens, will give EOW the powers to attach the properties of NSEL promoter Jignesh Shah, besides former directors, in connection with the Rs 5,600-crore payment fraud at the bourse.

Balsing Rajput, deputy commissioner of police in the EOW, told Business Standard: "We expect the two district collectors' recommendations within a day or two. We have sought invocation of the Maharashtra Act, which mainly covers the functioning of financial establishments. The invocation of its provisions will enable EOW to attach properties of Shah and others who could have gained out of the crime."

On conviction for fraudulent default, according to the Act, imprisonment for up to six years and a fine of up to Rs 1 lakh can be imposed on promoters, partners, directors or employees of a financial establishment.

The Act gives the state the powers to attach properties of firms that fail to return deposits after maturity or on demand from depositors. Properties can also be attached if a financial establishment does not pay interest or other assured benefits, fails to provide the service promised against such deposit, or where the government has reasons to believe it is acting in a calculated manner against the interest of depositors with an intention to defraud them. Pending order from the designated court, the government can conduct the attachment through appointment of a competent authority.

EOW's action has come within days of the arrests of former NSEL vice-presidents Jai Bahukhandi and Amit Mukherjee over alleged fraud and bribery. These arrests were made on the basis of an FIR lodged against them, NSEL promoters, the board and other key employees.

Meanwhile, EOW on Monday recorded the statements of former NSEL director B D Pawar and a director of Delhi-registered Namdhari Food International and Harayana-based Namdhari Rice and General Mills were also recorded.

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