Somaiya moves CVC against NSEL promoters

Asks CVC to probe SNEL for ceating, fraud, forgery with 17,000 small farmers, small investors

A day after filing a complaint with the Mumbai Police against the National Spot Exchange Ltd (NSEL), Kirit Somaiya, president of Investors’ Grievances Forum, has filed a complaint with the Central Vigilance Commission (CVC) against NSEL’s promoters and the Forward Markets Commission on Tuesday.

Somaiya, who is also Bharatiya Janata Party’s (BJP) national secretary, said in a statement that he has asked CVC to probe the NSEL for fraud, forgery and cheating 17,000 small farmers and small investors. In his complaint, Somaiya said more than 5,000 small investors from Mumbai have lost their hard-earned money. He added the FMC failed in its duty to protect the small investors and, hence, it should also be probed.

According to Somaiya, both the CVC and the Economic Offences Wing of Mumbai Police should lodge a criminal case against the promoters and management of NSEL and FMC officials, who failed to detect the scam in time.

He said the brokers and warehouse keepers who have issued forged and false documents and information should also be investigated.

 

According to him, NSEL went bust a few days ago, resulting into loss of hard-earned savings of 17,000 senior citizens, farmers and others. “In spite of many assurances by NSEL, we have not seen a single investor getting paid. Where has the money gone?” Somaiya asked.

He said soon after the Government of India had exempted NSEL from regulatory network in 2007-08, rampant money laundering, corrupt practices and cheating took place at NSEL.

“There was forged declaration about the stocks, bogus forged warehouses receipts, warehouses stock position. The same stock was pledged with more than one financial institution,” he said. State-owned MMTC and PEC have also lost Rs 300 crore in the scam. “The godowns are empty and no one knows on what basis the satta (gambling) took place?” he said.

 

According to Somaiya, the scam took place with the connivance of promoters, owners, members of NSEL, officials of FMC and the consumer affairs ministry.

He added the consumer affairs ministry and FMC found violation as early as on April 27, 2012 and issued notices to NSEL. However, the ministry and FMC allowed NSEL to continue with the scam because the stoppage order was issued only on August 6, 2013 -- a full 16 months later, by which time the scam rose to Rs 8,000 crore.

“We want a court-monitored investigation into the entire NSEL scam as the government is trying to hush up the entire issue,” said Somaiya.