FIR against NSEL, FTIL promoters, directors, staff

Police raids at 185 places; borrowers, brokers, defaulters among those booked

The Economic Offences Wing (EOW) of Mumbai police on Monday lodged an FIR against National Spot Exchange Ltd’s (NSEL’s) promoters, board of directors and key employees in connection with the payment crisis that has engulfed the bourse. Also booked were NSEL’s parent company Financial Technologies (FTIL) and its directors, 25 borrowers, some defaulters, promoters and directors of defaulting companies and some brokers. The FIR does not name individuals. EOW teams are raiding offices and houses at 180 places across the country — 35 of those in Mumbai alone.

The FIR was lodged after a special investigation team (SIT) that investigated the payment crisis concluded there was a cognisable offence. It invoked Sections 409, 465, 467 and 471 of the Indian Penal Code and also the Information Technology Act. The sections pertain to cheating, forgery, breach of trust and preparing forged documents.

“The searches and raids in Mumbai will cover the offices and residences of the NSEL promoters, directors and key officials and also FTIL offices and those of its directors,” EOW Deputy Commissioner of Police Balsing Rajput told Business Standard. Asked whether arrests were likely soon, he said arrests would be made, if required, after the verification of documents.

In a statement, NSEL said, ‘’NSEL has filed complaints with the EOW. We understand that investors have also filed several complaints. Today, EOW officials initiated searches on 24 NSEL borrowers’ premises across the country. EOW also searched NSEL premises today. We welcome any action by the government authorities. It is to help recover money from borrowers. NSEL and Financial Technologies Group will fully cooperate with the authorities in these investigations and are open to any scrutiny to bring the actual culprits to book.’’

The searches and raids in Mumbai are on the offices and residences of the NSEL promoters, directors and key officials and also of FT offices and their directors.

Future action will be taken after EOW teams complete the verification of all documents.'' To a particular question on when the arrest of concerned persons against whom FIR has been lodged will take place, Rajput reiterated that it will be done, if required, only after the verification of necessary documents.

As reported by BS, SIT headed by Rajput had submitted its report on September 16 to the Mumbai commissioner of police Satyapal Singh and joint commissioner of police Himanshu Roy.

SIT in its comprehensive investigation based on the complaints received from NSEL and also from a couple of investors have arrived at a conclusion that it is a criminal offence. It is a case of forgery, fraud and cheating.

SIT had conducted its probe after receiving crucial inputs from the Forward Markets Commission and Registrar of Companies. He added that during the entire probe the SIT also focused on protection of investors.