Top NSEL brass, executives failed in duty leading to scam: ED

Tags: News
The Rs 5,600 crore NSEL scam could have been averted had its top management and other functionaries "performed their duties and exercised due diligence" to check the dubious activities of defaulting firms which have been alleged to have cheated numerous investors, investigation by Enforcement Directorate (ED) has revealed.

The central probe agency which registered a criminal FIR in this case in October last year to probe money laundering instances scanned the business transactions and financial connections of a majority of the defaulting firms and then recorded in its charge sheet that trading at the National Spot Exchange Limited (NSEL) was being conducted "only on paper and no actual commodity was procured or sold".

"If NSEL and the top management and others had performed their duties and exercised due diligence this fraud of Rs 5,600 crore would not have happened. It shows failure on the part of statutory bodies and the others," the ED said in its charge sheet, accessed by PTI.

The agency, which is conducting a parallel probe in this case under the Prevention of Money Laundering Act (PMLA) alongside the Mumbai police and other agencies, said the scam was unleashed as right from NSEL's former CEO Anjani Sinha to the business development section and warehousing section of NSEL had "individually and collectively committed breach of trust and the basic object of the Exchange".

The ED, which has so far attached assets to the tune of over Rs 500 crore of the defaulting firms, said the Income Tax searches, which led to the revelation that majority of the defaulting firms were allegedly running on empty warehouses, were important to stop the "loot". Otherwise this would have gone unnoticed, thereby defrauding several more depositors.

"If the Income Tax authorities had not stepped in, the loot in the name of commodity trading would have continued unabated resulting in huge loss to the financial market of the country," the probe agency said, adding the taxman found out that all the rules were "flouted" by the warehousing and other wings of NSEL.

EDITORIAL OF THE DAY

  • America, put an end to this mindless terror against Indian professionals

    Racial slurs, hate crimes and the daylight murder of an Indian technology professional in the US have just moved up the number of serious issues confr

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Sandeep Bamzai

Disequilibrium: Pawn to king four

Sir Conrad Corfield, heavy hitter of the British Political Department ...

Susan Visvanathan

The problem called JNU

Reservation is a word that some administrators and intellectuals find ...

Kuruvilla Pandikattu

We are all wired for empathy

Today the world is all abuzz about the science of ...