Mohan India moves out Rs 300 cr after NSEL fiasco

Investigators looking at the money trail say money moved from group entities to unrelated one

Delhi-based Mohan India, one of the largest borrowers at National Spot Exchange Ltd (NSEL), is said to have moved about Rs 300 crore to several entities unrelated to the group, after the exchange was forced to shut on July 31. According to NSEL records, Mohan India owes Rs 605 crore towards its exposure to sugar stocks. While the movement of money doesn’t necessarily imply any violation of law, it could make the recovery process much more difficult for investors.

Over the past few weeks, especially after August 1, money has been shifted out of group entities such as Mohan Built Developers, Yukati Builders, Meltreck Builders, Bharat Buildwell and Brinda Commodities. Some of these entities had received cash from Mohan India in the days before July 31, when NSEL was still functional, central agencies looking into the money trail said after examining the books and accounts of Mohan India. “The records show money parked in group entities has since been moved to unrelated entities. This could have been done as a precaution against any enforcement action such as freezing of bank accounts, attachment of assets, etc,” said a person who had seen these records.

However, Jagmohan Garg, promoter of Mohan India, told Business Standard, “The money has not gone anywhere. We are working on a settlement plan with investors. We expect to make an announcement in a day or two.”

The records further showed several trading entities directly related to the group or its directors such as Anuj Traders, Neki Ram Vijay Kumar, Sandeep Kumar Anuj Kumar and Vishnu Trading had received several crores of rupees after August 1. Before July 31, about 70 per cent of Mohan India’s receipts were accounted for by NSEL trades. Group company Brinda Commodities and another entity, Whizkid Promoters, accounted for the rest.

Mohan India is promoted by Delhi-based Garg, who is said to have interests in real estate. The company is also said to have made payments to other NSEL customers such as Tavishi and SR Bhatolia & Co.

According to NSEL records, Mohan India owes Rs 605 crore towards its exposure to sugar stocks. In a statement, it had said Mangla Shree Properties, a client of Mohan India, had an exposure of Rs 720 crore. However, a Business Standard visit showed Manglashree Properties owned a mall and had no sugar stock.

Investigators said Mohan India’s records did not show any payment made to or received from Manglashree.