NSEL PMLA case: ED attaches mutual funds worth Rs 135cr

The ED today attached assets, in the form of mutual funds, worth Rs 135 crore in connection with its money laundering probe in the NSEL scam case.
The agency's zonal office here issued provisional orders under the Prevention of Money Laundering Act (PMLA) against Financial Technologies Limited (FTIL), now known as Ms 63 Moons Technologies Limited.
"Bonds worth Rs 135 crore in possession of Ms 63 Moons Technologies Limited have been attached provisionally and the total attachment (against them) is Rs 1,253 crore. The total attachment in the case, including those of others, stands at Rs 2,191 crore," the Enforcement Directorate said.

"Investigations have revealed that the National Spot Exchange Limited was acting as a platform for defaulters and was earning by the process of charging various fees and penalties...Among others.
"The gross income earned by the NSEL from such paper transactions was Rs 1,112.03 crore from 2008-09 to 2013-14. The trades executed on its portal were rarely backed by an equivalent quantity of goods which was in the knowledge of the NSEL executives," it said.
Specifying the role played by the FTIL, the agency said: "All circulars issued were discussed in the board meeting comprising key management personnel of the FTIL in the board of the NSEL and the board used to ratify and approve the same.

"By virtue of its shareholding of 99.99 per cent in the NSEL, the FTIL has complete authority over all the affairs of the NSEL enabling it to appoint all Directors on the board of the NSEL and through them (had) effective control over its functioning," it said.

The ED, along with the Economic Offences Wing of the Mumbai Police, had registered a criminal case under the Prevention of Money Laundering Act (PMLA) in 2013 to probe the case.
The ED had in March 2015 also filed a 20,000-page charge sheet against the NSEL and 67 others in a court here alleging the NSEL funds were laundered and "illegally ploughed into purchase of private properties".

An attachment order under the PMLA is aimed at depriving the accused from obtaining illegal benefits of their ill-gotten wealth and such an order by the ED can be challenged before the Adjudicating Authority of the said Act within 180 days.
NSEL's payment troubles started after it was ordered by regulator the Forward Markets Commission (FMC) in July 2013 to suspend spot trade in most of its contracts due to suspected trading violations.
The exchange could not settle the outstanding trades, leading to investigations by the police and regulators to find out whether the exchange had defrauded traders by not enforcing rules requiring sufficient collateral to be set aside.