Mumbai police make second arrest in NSEL scam

The Mumbai Police today made a second arrest in the Rs 5,600-crore National Spot Exchange (NSEL) scam by taking into custody Jay Bahukhundi who was an assistant vice-president with the crippled spot exchange.
"Jay Bahukhundi, a former assistant vice-president and in-charge of know your customer (KYC) department that is tasked with verification of borrowing companies and investors etc at NSEL, was arrested today," said Additional Police Commissioner, Economic Offences Wing, Rajvardhan Sinha.
Yesterday, the EOW arrested Amit Mukherjee, another assistant vice-president of the exchange. It was the first arrest in the scam that came to light in July.
Mukherjee was remanded in police custody till October 18 by a local court today.

According to police sources, Mukherjee, during the interrogation, put the blame squarely on Bahukhundi, alleging that it was the latter's responsibility to carry out background checks and verfication of authenticity of various companies, their directors and existence of warehouses, etc.
"Also, networth of various companies is wrongly shown in the books of accounts of NSEL. Bahukhundi's wrong deeds are one of the reasons for the entire mess," said another officer.
According to police, the borrowers had been diverting funds to other businesses, including real estate, but neither Mukherjee nor Bahukhundi brought that to the management's notice.
The officer said "the two even did not inform about the non-availability of stock or pledging of stock with other lenders and simply allowed borrowers to siphon off funds." The investigators have also found that the borrowers didn't have physical control of stock against which money was borrowed.