Thousands of people invest their money, hard-earned and otherwise. Promoters and employees hard-sell investment products, promising capital safety and handsome returns, and raise thousands of crores of rupees. The money goes into real estate, film production and even abroad, all outside the stated investment objectives. One day, the government cracks down. Both cases end up with the Economic Offences Wing (EOW) of Mumbai police. The similarities between Speak Asia and National Spot Exchange (NSEL) end here.
The ways the law has caught up with them are as contrasting as Sahil and Samar, the physically identical but mentally different Aamir Khans of Dhoom 3, evoking curiosity across social media. This is to some extent dictated by the promoters' response.
When the Speak Asia scam broke out in May 2011, a Singapore resident, Harender Kaur, was its chief executive. Indian operations were headed by one Manoj Sharma. The names of the owners of the company were not made public until much later. Ram Sumiran Pal and Ram Niwas Pal, the alleged masterminds and promoters of the online survey company, were arrested nearly 30 months later in quick succession in Delhi and Bangalore. But, Sharma and Kaur are still at large.
While the Pal brothers went underground and allowed the management led by Kaur and Sharma to handle media and law enforcement agencies in the initial months, the NSEL promoters led by Financial Technologies group promoter Jignesh Shah played a more proactive role. They went out and announced first that the money was with the borrowers, put out lists of their names and dues in the public domain. They later alleged employee fraud and even got Sinha to file an affidavit swearing full responsibility for the Rs 5,600-crore payment crisis and clearly absolving the promoters and directors of any responsibility in the debacle. Sinha would later, after his arrest, reverse this statement and blame Shah and Co. As a police officer told me recently, arrest or custodial interrogation is probably the prerogative of the investigating officer and a matter of strategy. "Even the court can't ask me this question... how can you?" he said to me.
The vastly different investor profiles of the two scams have also seemed to have dictated different courses. Well-heeled investors in NSEL, which included some listed firms and top brokers, have worked on the money trail, identified assets and helped in the recovery process. The EOW has claimed that assets worth nearly 75 per cent of the dues (Rs 3,500 crore) have been attached/secured so far. Though the Bombay High Court recently expressed some reservations against the procedures followed in the attachment, in the case of Speak Asia, which had raised over Rs 2,000 crore, recoveries have been minimal.
According to a recent police release, "More than 210 bank accounts containing over Rs 142 crore have been frozen. The brothers' arrest could bring in more in the form of property investments in Dehradun, Delhi and Uttar Pradesh". The so-called Speak Asia panelists or investors have organised themselves and have even filed cases against the enforcement agencies, including in the Supreme court. That strategy has not helped them. Finally, a bulky chargesheet has been filed against Speak Asia after the nabbing of the promoters but will the EOW's strategy in the NSEL case work better? A chargesheet expected to be filed soon may give some answers.
The ways the law has caught up with them are as contrasting as Sahil and Samar, the physically identical but mentally different Aamir Khans of Dhoom 3, evoking curiosity across social media. This is to some extent dictated by the promoters' response.
When the Speak Asia scam broke out in May 2011, a Singapore resident, Harender Kaur, was its chief executive. Indian operations were headed by one Manoj Sharma. The names of the owners of the company were not made public until much later. Ram Sumiran Pal and Ram Niwas Pal, the alleged masterminds and promoters of the online survey company, were arrested nearly 30 months later in quick succession in Delhi and Bangalore. But, Sharma and Kaur are still at large.
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This is different from the NSEL case, where members of the management, which included chief executive Anjani Sinha, marketing head Amit Mukherjee and warehouse operator Jai Bahukandi, have been arrested.
While the Pal brothers went underground and allowed the management led by Kaur and Sharma to handle media and law enforcement agencies in the initial months, the NSEL promoters led by Financial Technologies group promoter Jignesh Shah played a more proactive role. They went out and announced first that the money was with the borrowers, put out lists of their names and dues in the public domain. They later alleged employee fraud and even got Sinha to file an affidavit swearing full responsibility for the Rs 5,600-crore payment crisis and clearly absolving the promoters and directors of any responsibility in the debacle. Sinha would later, after his arrest, reverse this statement and blame Shah and Co. As a police officer told me recently, arrest or custodial interrogation is probably the prerogative of the investigating officer and a matter of strategy. "Even the court can't ask me this question... how can you?" he said to me.
The vastly different investor profiles of the two scams have also seemed to have dictated different courses. Well-heeled investors in NSEL, which included some listed firms and top brokers, have worked on the money trail, identified assets and helped in the recovery process. The EOW has claimed that assets worth nearly 75 per cent of the dues (Rs 3,500 crore) have been attached/secured so far. Though the Bombay High Court recently expressed some reservations against the procedures followed in the attachment, in the case of Speak Asia, which had raised over Rs 2,000 crore, recoveries have been minimal.
According to a recent police release, "More than 210 bank accounts containing over Rs 142 crore have been frozen. The brothers' arrest could bring in more in the form of property investments in Dehradun, Delhi and Uttar Pradesh". The so-called Speak Asia panelists or investors have organised themselves and have even filed cases against the enforcement agencies, including in the Supreme court. That strategy has not helped them. Finally, a bulky chargesheet has been filed against Speak Asia after the nabbing of the promoters but will the EOW's strategy in the NSEL case work better? A chargesheet expected to be filed soon may give some answers.