With the arrest of former NSEL MD & CEO Anjani Sinha, and the authorities invoking the stringent Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, the endgame in the R5,600-crore NSEL default has begun. While there is the possibility that Sinha, arrested after eight hours of questioning by the Economic Offences Wing (EOW), could always recant his affidavit giving NSELs board a clean chit, the MPID will help EOW recover defaulter dues as their properties can be attached (see FTILs Spot on how NSELs board is indicted by the Grant Thornton forensic report).
Several defaulters have used the money with them to buy properties, one defaulter even built a shopping mall.
Senior EOW officials added investigations revealed he had taken bribes while heading the exchange. NSEL is a subsidiary of Financial Technologies India Ltd (FTIL), promoted by Jignesh Shah.
The working of NSEL was reported to the board by Sinha in his capacity as MD & CEO. He was the key person. The decision of allowing or rejecting any borrower and the due diligence related to KYC (know your customer) procedures was done by Sinha. We believe that in some cases he (Sinha) has also taken bribes just like (former assistant vice-president) Amit Mukherjee. Sinha was the main conspirator, Balsing Rajput, deputy commissioner of police (EOW), said.
While it could not be independently verified, a statement from the NSEL Investors Forum suggested that Sinha has blamed the board of NSEL for the crisis during his interrogation. "Investors are surprised that Anjani Sinha has gone back on his affidavit and has implicated Jignesh Shah and directors of NSEL," said Sharad Saraf, chairman, NSEL Investors Forum.
The police will present Sinha in the magistrate's court on Friday to seek police custody for him. Interestingly, the police has also put on record the fact that Sinha took almost 15 days to present himself before the EOW after being issued summons. We have placed it (delay) on record, Rajput said, pointing out that the first information report (FIR) was filed on September 30.
This is the third arrest in the NSEL case. On October 9, Mukherjee was arrested while Jay Bahukhundi, also former assistant vice-president, was arrested the following day.
The Enforcement Directorate has registered a 'preliminary inquiry' under the Prevention of Money Laundering Act, suspecting large-scale money laundering on the spot exchange, PTI reported. Sinha and his wife Shalini, who is managing director