The Bombay High Court today ordered that the National Spot Exchange Ltd (NSEL) be made a respondent in a PIL seeking transfer of a probe by Mumbai police to CBI into the alleged Rs 5,500-crore scam.
A bench headed by Justice P V Hardas asked the petitioner to make NSEL a respondent and asked the latter to file a reply. The matter has been posted after two weeks.
The PIL filed by activist Ketan Tirodkar argued that since the scam has national and international ramifications, only CBI has the necessary jurisdiction to probe this matter.
He said the NSEL case pertains to alleged financial embezzlements by Multi-Commodity Exchange (MCX) and Financial Technologies India Ltd (FTIL)--both promoted by Jignesh Shah.
The petition alleged those arrested so far like Nilesh Patel, a major borrower, and three employees of NSEL, including Anjani Sinha, were mere pawns in the game while concerted efforts were made to project Shah, the alleged mastermind in the fraud as a "victim".
"This attempt to project the mastermind of the scam as a victim of conspiracy by his employees and borrowers is an outcome of the pressure of vested interests in the corridors of power who have been benefited by the NSEL-MCX-FTIL triangular operations", according to the PIL.
During the market stint of MCX, NSEL and FTIL, Shah launched many international platforms (Bourses and Trading companies) in tax-havens, namely Mauritius, Botswana in Africa, Singapore and in Middle-east nations such as Dubai and Bahrain, to take advantage of the Double Taxation Avoidance Agreement [DTAA] signed by India as a member of a Consortium of multiple nations, the PIL alleged.
These platforms were in form of bourses facilitating trading in futures for various commodities. The revenue from these bourses was transferred to India without inviting any tax liability and also revenue from Indian entities was siphoned off to these countries in the guise of payment schedules to be honoured, the PIL further alleged.
In reality, there were no payment schedules honoured and it was a financial market gimmick to avoid paying taxes in India, the PIL contended.
It further argued that Mumbai EOW has not yet sent any team abroad for interacting with the market regulators in these nations as well as the tax authorities. Letters Rogatory (to seek information from foreign countries about Shah's entities) also were not dispatched for a long time.
