EOW starts process to auction properties of NSEL borrowers

The economic offences wing (EOW) of the Mumbai police has initiated the process of auctioning properties of major National Spot Exchange Ltd (NSEL) borrowers. This pertains to a Rs 5,574-crore payment crisis at the exchange last year.

To begin the process of liquidation, EOW has sent a list of the attached properties of a few leading borrowers to the authority concerned. So far, EOW has proposed auctioning the properties of Ark Imports (when NSEL suspended operations, its dues stood at Rs 719 crore), Namdhari Foods (Rs 61 crore), Mohan India (Rs 879 crore), Lotus Refineries (Rs 252 crore) and NK Proteins (Rs 943 crore).

Subsequently, a court will be approached for liquidation of these assets.

The Forward Markets Commission, supervising the recovery of funds from NSEL borrowers, has asked the NSEL board to file civil suits against the defaulter borrowers. It has also convened a meeting of the NSEL board and a monitoring and auction committee, comprising representatives of NSEL investors and brokers, on July 22.

So far, EOW has attached 95 per cent of the funds involved in the scam. This includes movable and immovable properties of directors and promoter of NSEL, the promoter company (Financial Technologies) and borrowers.

A bail plea of Jignesh Shah, chairman of Financial Technologies, came up for hearing on Wednesday in the high court here, but was adjourned till Thursday. Earlier, the case was being heard at a sessions court. Shah's bail plea was rejected on the grounds that there was a possibility he would tamper with evidence.

Shah was arrested by EOW on May 7.