Newsmaker: Anjani Sinha

Rise and fall of NSEL's blue-eyed boy

Anjani Sinha was taken into custody a few days ago-after former vice-presidents Jai Bahukhandi and Amit Mukherjee-for the Rs 5,600-crore settlement crisis at National Spot Exchange Ltd (NSEL). The former head of the commodity exchange and now the alleged mastermind of one of the country's biggest ponzi schemes had served as chief executive of the Magadh and the Ahmedabad stock exchanges. Call it coincidence, both the bourses saw fraudulent activities during his tenure, resulting in the suspension of the board of one of them.

Handpicked by Jignesh Shah, the promoter of NSEL, Sinha never had to face any trust issues. He quickly became Shah's blue-eyed boy. Shah called him the best brain in the commodities market, crediting him for NSEL's rapid rise. NSEL accounted for half of the profit of its promoter, the Financial Technologies group.

That made him hugely popular among the CEOs of other group companies. They wanted to be close to Sinha as his profit-making company could generate business for them. However, now they are distancing themselves from Sinha and the company he headed. The National Bulk Handling Corporation, for instance, has issued a statement saying it had only a minuscule exposure to NSEL.

Sinha, who by his own admission is fond of reading "thrillers and suspense novels", filled his team with trusted aides. They are now believed to be behind the settlement crisis.

Sinha kept making comforting statements until the day the bubble burst. A day before NSEL's first default in August, he told investors that the exchange had double the required amount of Rs 174 crore to meet the first weekly settlement. When the Forward Market Commission, which had got a whiff of what was going on, wanted a forensic audit of the exchange, he brushed it aside as merely procedural.

The fallacy of his statements became clear when trading at NSEL came to a standstill in August. However, his dilly-dallying didn't stop there. In an affidavit in mid-September, he accepted responsibility for whatever happened, but he retracted that statement after his arrest last week, saying the NSEL board was behind the scam. Investors, however, no longer want to trust his words.