In a significant development in the National Spot Exchange Ltd affair, 58 investors and 17 brokers/members of the exchange have filed a complaint with the Economic Offence Wing of the Mumbai Police against the defaulters and the exchange promoters.
"We have filed complaint against NSEL, Jignesh Shah, the promoter of NSEL; and executives including Amit Mukherjee and Jai Bhaukhundi, auditor Mukesh Shah and 24 defaulters and their clients," NSEL Investor Forum Chairman Sharad Saraf said.
An NSEL official, when asked for comment, said the matter is already under investigation. "We believe that focus should be on recovery from defaulting members. NSEL board and management aim to work together with the Investor association to recover the dues," the official said.
NSEL Board and the new management team has already filed complaint with EOW and the ex-MD & CEO Anjani Sinha had in his affidavit said that he did not keep the Board informed about the wrongdoings of his team, the official added.
The complaint with EOW alleges that "99 per cent" of the delivery business is a fraud, evidenced by complete absence of underlying goods and issuance of fake warehouse receipts.
NSEL built its business model around trading in "non existent" goods and giving investors an impression that goods were in warehouses, when none existed, the complaint added.
The complaint also alleges cozy relationship between the defaulters, promoters and management wherein goods were stored in premises of defaulters, which did not have storage capacity for stated quantities.
"With the help of NSEL and government agencies, we expect to recover around Rs 4,000 crore, which is 65-70 percent of the total outstanding of Rs 5,500 crore from the top five borrowers of the exchange," Saraf added.
"We have identified that the Rs 5,500 crore is in the system with NSEL, its promoter company Financial Technologies and with its 24 borrowers," Saraf said.
Investors forum members on Monday met Economic Affairs Secretary Arvind Mayaram and sought that investigative agencies should take stringent action against those members who are not making payments.
NSEL is facing the problem of settling Rs 5,500 crore dues of 148 members/brokers, representing thousands of investor-clients, after it suspended trade on July 31 on the government's direction.