 "Personnel, expertise crunch hurts Mumbai EOW")
Various arrests, followed by the subsequent attachment of properties, in the Rs 5,600-crore National Spot Exchange Ltd (NSEL) scam have brought the Economic Offences Wing (EOW) of the city police in the news. The constraints of manpower and expertise and the complex nature of the case notwithstanding, EOW is working round the clock in this case.
Last week, EOW arrested eight employees of multi-level marketing firm QNet for duping investors while selling products such as magnetic disks, herbal products and holiday schemes. The company is also accused of using the banned binary-pyramid business model to entice investors.
The arrest of Ram Sumiran Pal, the mastermind of the Speak Asia fraud, provided a shot in the arm to EOW. The Singapore-registered Speak Asia Pte first came under the lens of investigative agencies about 30 months ago, for allegedly raising money from a large number of people under the garb of running an online survey company. In this case, EOW has, so far, frozen about 210 bank accounts containing Rs 142 crore in the case. Besides, an additional 150 bank accounts are being probed.
These are some of the 2,000 cases being probed by the Maharashtra Police EOW, started in 1992. The agency is also investigating property-related cases worth about Rs 11,000 crore. The agency formally began operations in 1994.
With just 76 officials and a staff of 176, EOW is regularly pursuing its proposal of deploying an additional 50 officials and staff. The agency’s units include those for banking, housing, cheating, job rackets, shares, stamps, investor-related frauds under the Maharashtra Protection of Interests of Depositors Act, multilevel marketing and intellectual property right. It also has separate units for training, research and intelligence.
An EOW official told Business Standard, “Adequate emphasis is given on training and research. Periodical training is organised by inviting faculties, lawyers and experts from various fields, including banking, markets, computer and forensic sciences. Focus is laid on how to deal with complaints, how to read first information reports, the legalities of seizure and attachment of properties, forensic accounting and auditing.” This apart, officials and staff are trained on issues relating to insurance, commodities markets, slum rehabilitation frauds and tracking of emails and money, etc.
“Areas covered include initial public offerings, the role of merchant bankers, share allotment and preferential share allotment. Officers must have sound integrity and knowledge and unless the legal provisions and complexities are known, they won’t be in a position to firmly tackle such cases,” the official said.
Former Mumbai Police commissioner R D Tyagi says EOW is handling multiple cases involving financial frauds. However, he adds considering the complex nature of these cases, the agency is acutely understaffed. “EOW’s staff should be increased, especially when the spate of white-collar frauds is increasing in Mumbai, India’s commercial and financial capital…Training should be upgraded from time to time with the involvement of experts on economic and financial aspects,” he says.
EOW has also investigated the registration of 50 imported cars through alleged forged documents in a case involving leading film stars. It also probed the multi-crore scam in which many secured houses for undeserving people through Slum Rehabilitation Authority schemes.
An EOW official, however, says the conviction rate is quite low. As of now, cases filed in 1991-2001 are being heard. EOW filed charge sheets in 80 cases in 2010, 84 cases in 2011 and 122 cases in 2012. The official added in 2012, a proposal was sent to the state law and judiciary department for the establishment of a special court to try EOW cases. However, this is yet to be cleared.
Currently, the Reserve Bank of India has jurisdiction on non-banking financial companies. However, EOW has urged it be given powers to probe crimes related to these entities.
Last week, EOW arrested eight employees of multi-level marketing firm QNet for duping investors while selling products such as magnetic disks, herbal products and holiday schemes. The company is also accused of using the banned binary-pyramid business model to entice investors.
The arrest of Ram Sumiran Pal, the mastermind of the Speak Asia fraud, provided a shot in the arm to EOW. The Singapore-registered Speak Asia Pte first came under the lens of investigative agencies about 30 months ago, for allegedly raising money from a large number of people under the garb of running an online survey company. In this case, EOW has, so far, frozen about 210 bank accounts containing Rs 142 crore in the case. Besides, an additional 150 bank accounts are being probed.
These are some of the 2,000 cases being probed by the Maharashtra Police EOW, started in 1992. The agency is also investigating property-related cases worth about Rs 11,000 crore. The agency formally began operations in 1994.
With just 76 officials and a staff of 176, EOW is regularly pursuing its proposal of deploying an additional 50 officials and staff. The agency’s units include those for banking, housing, cheating, job rackets, shares, stamps, investor-related frauds under the Maharashtra Protection of Interests of Depositors Act, multilevel marketing and intellectual property right. It also has separate units for training, research and intelligence.
An EOW official told Business Standard, “Adequate emphasis is given on training and research. Periodical training is organised by inviting faculties, lawyers and experts from various fields, including banking, markets, computer and forensic sciences. Focus is laid on how to deal with complaints, how to read first information reports, the legalities of seizure and attachment of properties, forensic accounting and auditing.” This apart, officials and staff are trained on issues relating to insurance, commodities markets, slum rehabilitation frauds and tracking of emails and money, etc.
“Areas covered include initial public offerings, the role of merchant bankers, share allotment and preferential share allotment. Officers must have sound integrity and knowledge and unless the legal provisions and complexities are known, they won’t be in a position to firmly tackle such cases,” the official said.
Former Mumbai Police commissioner R D Tyagi says EOW is handling multiple cases involving financial frauds. However, he adds considering the complex nature of these cases, the agency is acutely understaffed. “EOW’s staff should be increased, especially when the spate of white-collar frauds is increasing in Mumbai, India’s commercial and financial capital…Training should be upgraded from time to time with the involvement of experts on economic and financial aspects,” he says.
EOW has also investigated the registration of 50 imported cars through alleged forged documents in a case involving leading film stars. It also probed the multi-crore scam in which many secured houses for undeserving people through Slum Rehabilitation Authority schemes.
An EOW official, however, says the conviction rate is quite low. As of now, cases filed in 1991-2001 are being heard. EOW filed charge sheets in 80 cases in 2010, 84 cases in 2011 and 122 cases in 2012. The official added in 2012, a proposal was sent to the state law and judiciary department for the establishment of a special court to try EOW cases. However, this is yet to be cleared.
Currently, the Reserve Bank of India has jurisdiction on non-banking financial companies. However, EOW has urged it be given powers to probe crimes related to these entities.