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Anjani Sinha, former MD & CEO of NSEL, was arrested by the economic offences wing of the Mumbai police in October last year in connection with the payments crisis at the exchange. He was granted bail by the Bombay High Court on 9 May, but remained in judicial custody as he failed to secure a surety. Now out on bail, Sinha spoke to Sharleen D'Souza about the payments crisis and related issues. Edited excerpts:
Who is responsible for the entire NSEL crisis? Did FTIL (Financial Technologies, the promoter entity) or its promoters have anything to do with the scam?
This matter is under investigation by EOW officials, who are competent enough to identify the role played by various parties. So, we should wait for the chargesheet to be filed by EOW to know the details.
The FTIL board have entirely shifted the blame on you for the scam. As its then MD & CEO, could you have done anything to stop the scam?
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Even after suspension of trading, you said there was enough stock to pay investors. Were you were not aware of the real stock positions with borrowers?
In the agreement entered into with the defaulting parties, stock was required to be maintained by them. They had also given declarations and other documents to the effect that stock was being duly maintained. In the case of some parties such as Top Worth, it was also established by the investigating agencies that there was adequate stock. However, the investigating agencies will give their findings, fixing the responsibility.
Why didn't you take action against those whom you alleged were bribed by borrowers?
NSEL had filed a complaint with the investigating agencies in September 2013, naming the officials guilty of misdeeds.
What is the next action to be taken so that investors get their money back, as well as prove your case?
This is the most important question; let us focus on this. As you are aware, the defaulting parties are identified. Since all trades are electronic, having a complete audit trail, there cannot be any ambiguity about the extent of liability of the respective parties. If the high court appoints a committee to resolve the matter, it can conduct a one-to-one interaction with all the 24 parties and concertise their repayment schedule.
Once such a schedule is approved by the court, it can be implemented. Money realised under such a repayment plan should be distributed among clients periodically. If there is a liquidity gap, we should take the help of some investment bankers or ARCs (assets reconstruction companies) to monetise the assets of defaulting members. If a defaulting member does not cooperate, the committee may resort to auctioning their properties. Since EOW has already attached properties worth Rs 5,000 crore, it is possible to repay the entire money due to the clients over a period of time, if we adopt such a comprehensive approach. I would be willing to assist the committee or EOW in such a process.
Do you think the NSEL money has been siphoned off abroad?
The entire process of funds movement executed by NSEL has happened by way of debiting and crediting bank accounts of the respective buyers and sellers. Hence, money has been credited by NSEL in the settlement accounts of the respective defaulting members and there is no overseas transfer in this regard. If a defaulting member has transferred funds abroad, it can be tracked by the investigating agencies by trailing the money transfer from the settlement accounts of the respective defaulting members.
