24 NSEL borrowers' books show money used for biz

IT has found that money has been accounted for in the books

Contrary to the general perception, the income-tax (I-T) department, in its survey of 24 borrowers of National Spot Exchange Ltd (NSEL), found most of these had used the money they borrowed for their businesses.          

“Barring one or two, the other borrowers’ books show that they have used the money in their businesses. The investigation is still on,” said a senior I-T official.

After NSEL suspended trading on July 31 and several investors found that their money was stuck as 24 borrowers of the exchange could not pay their dues.

This had prompted the ministry of finance to find out the money trail from those 24 borrowers and the I-T department had surveyed all of them on August 22. In that survey, I-T officials found that money has been accounted for in the books.

“These were merely financial transactions for long-term borrowings and have all been accounted for in most cases,” the I-T official said.

However, the matter doesn’t end here. As the IT official said, “the investigation is still on.” The issue now to be investigated is the stock in warehouses against which they have borrowed money. IT is calling all of them to understand more as to where is the stock? The question came up as the agency -SGS- appointed by the NSEL to assess the stock lying in the warehouses against which the money has been borrowed found that stock in most warehouses is lesser by 85 per cent.

IT’s fear is that the stock seems to have moved out clandestinely out of the warehouses or forged warehouse receipts- without having actual stocks- may have been issued. If stock moves out clandestinely that it would have generated black money and that is what IT is worried about.