NSEL case: SFIO probing FTIL, 18 associate cos

Government today said an SFIO probe has been ordered against FTIL as well as its 18 subsidiaries and associates in connection with the National Spot Exchange Ltd (NSEL) scam.
Jignesh Shah-led Financial Technologies (India) Ltd has changed its name to 63 Moons Technologies.
Asked whether the government has directed SFIO to investigate the NSEL scam, Minister of State for Corporate Affairs Arjun Ram Meghwal replied in the affirmative.
In a written reply in Lok Sabha, he said probe has been ordered into the affairs of NSEL, FTIL, their 18 subsidiaries and associate companies.
The agency will also investigate the "20 defaulting entities and their role/nexus with the brokers", the minister said.

The probe by the Serious Fraud Investigation Office (SFIO), which comes under the Corporate Affairs Ministry, was ordered on October 28.

In the wake of Rs 5,600-crore payment crisis at NSEL, which came to light in late 2013, the ministry had sought merger of the bourse with FTIL as well as replacement of the existing FTIL management.
The ministry, in February this year, directed the merger of the scam-hit NSEL with FTIL, in a first-ever order to merge the two private companies.
While the merger order has been challenged at the Bombay High Court, the matter regarding replacing the current FTIL management is before the National Company Law Tribunal (NCLT).

The government has been monitoring the action taken by investigating and enforcement agencies for violations of law, criminal offences and default in payments to investors on the NSEL platform.
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In a separate written reply, Meghwal said Economic Offences Wing of Mumbai Police has data of 12,768 investors who claimed to have lost money in NSEL.
"The verification of genuineness of investors can be done through the examination of Know Your Customer (KYC) documents. Such verification is in progress on the basis of KYC documents submitted by the investors," he said.
He was responding to a question on whether the government has verified and authenticated data of 13,000 investors who claimed to have lost money in the National Spot Exchange Ltd (NSEL).

"Investigations were initiated by the Income Tax Department in cases of members/ brokers of NSEL and investors with substantial amounts with a view to verify the source of investment and whether the profits arising out of such investments had been disclosed to the Income Tax authorities," the minister said.
According to him, results of the investigation were disseminated to the jurisdictional assessing officers for appropriate action.
Information on 12,735 and 9,589 traders/ brokers, suspected to have claimed bogus bad debts/ violated provisions of I-T Act, respectively, were received from NSEL in June 2016, he added.
"This information was disseminated to field authorities for appropriate action," Meghwal said.