NSEL’s ex-boss Sinha arrested, puts blame on Jignesh, board
Oct 17 2013 , Mumbai
This was the third arrest in the ongoing NSEL payment default investigations after NSEL investors lodged a complaint with the EOW about a month ago. The police had earlier arrested Amit Mukherjee, head of business development, and Jay Bahukhundi, head of warehousing, in connection with the case.
The NSEL Investors Forum, a body representing 13,000 investors affected by the payment crisis, reacted to the development with optimism.
“We are confident that he (Sinha) will provide valuable information on the money trail and the transactions done by the exchange,” the forum said in a statement.
“However investors are surprised that Anjani Sinha has gone back on his affidavit and has now implicated Jignesh Shah and NSEL directors. This is in complete variation of what he had earlier stated in the affidavit,” the forum said. This raises questions over the reliability of Sinha, and investors are surprised that such an unreliable person had been given the task of managing the exchange, the forum said.
Over 50 investors of NSEL had filed a joint complaint on September 18 against the bourse, its promoter Jignesh Shah, the board of directors, executives and 24 defaulting borrowers. The 40-page complaint lodged with the joint commissioner of the economic offences wing of the Mumbai police talked of massive fraud, criminal conspiracy, cheating and criminal misappropriation by those named in the complaint and sought charges against them under various sections of the Indian Penal Code, 1860 (IPC).
“The amount involved is huge and the modus operandi of the accused in these offences was complex. The role played by each accused is needed to be investigated in great detail,” the complainants said.
Before he was removed from NSEL as MD & CEO, Sinha had issued a statement on August 14 owning full responsibility for the payment default at the exchange. “As the MD and CEO, I and my management team at the National Spot Exchange have been solely and directly responsible for all operations, including screening of parties, warehouse management, risk management and other related company matters,” Sinha had then said.
He had further stated that it was the responsibility of the NSEL management team to take the matter forward by collecting all pay-in obligations from the 24 buyers. Sinha was removed from his post on August 20.
In another development, FMC on Thursday appointed two more independent directors on the board of the MCX taking the total strength of the board to 10, in an attempt to insulate it from the tainted officials of FTIL. G Anantharaman, former whole-time member of Sebi and Pravir Vohra, former chief technology officer of ICICI Bank, will be the FMC-nominated independent directors on the MCX board. The MCX board will meet on October 22 to take up the restructuring of the board as directed by FMC.