ED files fresh chargesheet in NSEL money laundering probe, 19 firms named

The Enforcement Directorate Wednesday said it has filed a fresh chargesheet in the National Spot Exchange Limited (NSEL)-linked money laundering investigation.

The prosecution complaint was filed on January 28 before a special Prevention of Money Laundering Act (PMLA) court in Mumbai against 19 broking entities and their directors for allegedly colluding with NSEL officials to "allure" investors to trade on this platform, the federal agency said in a statement.

The court took cognisance of the chargesheet on February 3, it said.

The agency earlier filed six chargesheets against 94 accused and attached assets worth Rs 3,288 crore as part of this probe.

The probe found that broking companies, after getting registered with the NSEL, "misled" their clients by providing "false" assurances about the exchange and promoting "illegal" pairs trade contracts that were not allowed, the ED said.

In "collusion with" broking companies, NSEL established a system that "bypassed" the collection of warehouse receipts or physical commodities for their clients, knowing they were facilitating trades in such a manner, the agency said.

"The broking companies entered into a criminal conspiracy with the NSEL to allure the investors to trade onto the NSEL platform in promise of hefty returns, thereby cheating the investors through a fraudulent scheme."  "The brokerage earned through these illegal means was further utilised in business operations resulting in layering and integration of proceeds of crime and projecting them as untainted funds," it alleged.

The ED, along with the Economic Offences Wing of the Mumbai Police, had registered a criminal case in 2013 under the PMLA to probe the NSEL and others associated with it.

The agency had alleged that the accused persons in the said case hatched a criminal conspiracy to defraud investors, induced them to trade on the platform of NSEL, created forged documents like bogus warehouse receipts, falsified accounts and thereby committed criminal breach of trust against about 13,000 investors to the tune of Rs 5,600 crore.