 "Mumbai police secures FTIL assets worth Rs 2,000 cr")
The Economic Offences Wing (EOW) of the Mumbai Police on Tuesday ‘secured’ Rs 2,000 crore worth of real estate and financial assets of Financial Technologies (India), or FTIL - the parent company of the National Spot Exchange (NSEL) - for attachment.
The move comes almost three years after the Rs 5,600-crore NSEL scam, involving 13,000 investors, was discovered. Last year, FTIL was renamed 63 Moons Technologies.
“FTIL assets worth Rs 2,000 crore, which includes FT Tower, its headquarters in Andheri and other properties and bank deposits have been secured,” a senior official of EOW told Business Standard.
The assets were secured under the Maharashtra Protection of Interest of Depositors (MPID) Act, the official added.
The official refrained from using the word ‘attach’ and said the assets would be attached once approval for the same comes from the state government.
He said ‘securing’ would prevent FTIL from using the real estate assets as collateral or siphon off financial assets. The department would also write to individual banks and mutual fund house where the FTIL money has been invested, to secure its assets, he added.
“We have received a letter from EoW dated July 18, 2016 at 6:00 pm today on July 19 securing assets of FTIL. 63 Moons is a listed company having 63,000-plus shareholders and about 1,000-plus employees. We will take all legal remedies to protect their interest. There is no legal basis for the said action and we’ll be moving court soon on the said letter,” said a 63 Moons spokesperson.
Senior criminal lawyer Majeed Memon said: “The seizure of substantial properties related to NSEL scam, on the face of it, appears to be a major step forward by the investigative agency in solving the case.”
However, Memon pointed out that according to the legal process, this seizure will have to be brought to the notice of the court concerned, which would grant or withhold its approval, depending on the submissions by the prosecution that this particular property is the part of ‘tainted property’ or ‘proceeds of crime’ in the instant case.
On the other hand, FTIL or any other person in possession of the said property or claiming to be its owner, may approach the court and make a prayer for unsealing the property.
EOW’s action came a day after FTIL founder Jignesh Shah was sent to judicial custody till August 1.
Shah was arrested by the Enforcement Directorate (ED) on July 12 under the Prevention of Money Laundering Act (PMLA), for ‘non-cooperation’ and on the basis of 'fresh findings' on the Rs 3,721-crore money trail in the case.
Earlier, EOW had attached the properties of Shah, key officials of NSEL and 24 defaulters amounting to Rs 6,200 crore.
Last year, the Maharashtra government formally attached a bungalow belonging to Jignesh Shah. This includes bungalow, R Square, located in the upscale Juhu scheme area in western Mumbai.
The state government has issued a notification and taken Shah's Juhu residence Bungalow property under its control. In December 2013, three properties of Shah – the Juhu bungalow, a row house in Aarey Colony in Goregaon, and some other real estate – were attached by the EoW.
According to sources, the properties of the borrowers who defaulted and those of the directors of FTIL and some officials of NSEL had been attached by the EoW in December 2013.
Apart from these, Shah's shares in FTIL and Indian Energy Exchange, and fixed deposits were attached by the EoW.
The NSEL payment crisis emerged after it suspended trading on July 31, 2013. The exchange could not settle the outstanding trades, triggering investigation 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.
The move comes almost three years after the Rs 5,600-crore NSEL scam, involving 13,000 investors, was discovered. Last year, FTIL was renamed 63 Moons Technologies.
“FTIL assets worth Rs 2,000 crore, which includes FT Tower, its headquarters in Andheri and other properties and bank deposits have been secured,” a senior official of EOW told Business Standard.
The assets were secured under the Maharashtra Protection of Interest of Depositors (MPID) Act, the official added.
The official refrained from using the word ‘attach’ and said the assets would be attached once approval for the same comes from the state government.
He said ‘securing’ would prevent FTIL from using the real estate assets as collateral or siphon off financial assets. The department would also write to individual banks and mutual fund house where the FTIL money has been invested, to secure its assets, he added.
“We have received a letter from EoW dated July 18, 2016 at 6:00 pm today on July 19 securing assets of FTIL. 63 Moons is a listed company having 63,000-plus shareholders and about 1,000-plus employees. We will take all legal remedies to protect their interest. There is no legal basis for the said action and we’ll be moving court soon on the said letter,” said a 63 Moons spokesperson.
Senior criminal lawyer Majeed Memon said: “The seizure of substantial properties related to NSEL scam, on the face of it, appears to be a major step forward by the investigative agency in solving the case.”
However, Memon pointed out that according to the legal process, this seizure will have to be brought to the notice of the court concerned, which would grant or withhold its approval, depending on the submissions by the prosecution that this particular property is the part of ‘tainted property’ or ‘proceeds of crime’ in the instant case.
On the other hand, FTIL or any other person in possession of the said property or claiming to be its owner, may approach the court and make a prayer for unsealing the property.
EOW’s action came a day after FTIL founder Jignesh Shah was sent to judicial custody till August 1.
Shah was arrested by the Enforcement Directorate (ED) on July 12 under the Prevention of Money Laundering Act (PMLA), for ‘non-cooperation’ and on the basis of 'fresh findings' on the Rs 3,721-crore money trail in the case.
Earlier, EOW had attached the properties of Shah, key officials of NSEL and 24 defaulters amounting to Rs 6,200 crore.
Last year, the Maharashtra government formally attached a bungalow belonging to Jignesh Shah. This includes bungalow, R Square, located in the upscale Juhu scheme area in western Mumbai.
The state government has issued a notification and taken Shah's Juhu residence Bungalow property under its control. In December 2013, three properties of Shah – the Juhu bungalow, a row house in Aarey Colony in Goregaon, and some other real estate – were attached by the EoW.
According to sources, the properties of the borrowers who defaulted and those of the directors of FTIL and some officials of NSEL had been attached by the EoW in December 2013.
Apart from these, Shah's shares in FTIL and Indian Energy Exchange, and fixed deposits were attached by the EoW.
The NSEL payment crisis emerged after it suspended trading on July 31, 2013. The exchange could not settle the outstanding trades, triggering investigation 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.
