India News | Delhi Police Arrests Ex-CEO of NSEL for Duping Investors

New Delhi, Jan 18 (PTI) The Delhi Police has arrested a former CEO of National Spot Exchange Ltd for allegedly duping investors by assuring them fixed returns on fictitious trading, officials said on Monday.

Anjani Sinha was arrested on Sunday from Mumbai, they said.

Police said a complaint was filed by three persons who alleged that the brokerage firm Integrated Commodity Trades Pvt Ltd, Barakhamba Road, Delhi, through its directors has cheated them by inducement and misrepresentation regarding commodity trading on the platform of National Spot Exchange Ltd (NSEL).

The complainants were induced by the directors of the company to invest in commodity market, which is undertaken by them as trading and clearing member of NSEL, presenting it to be completely safe, as being regulated by government authorities, police said.

The alleged company had represented to the complainants that NSEL is a national-level electronic, transparent and institutionalised spot market which provides counter party guarantee in respect of all trades and which was regulated by Forward Markets Commission (FMC), police said.

The complainants accused Integrated Commodity Traders Pvt Ltd, NSEL, its CMD Jignesh Shah, former CEO Sinha and others of cheating, criminal misappropriation and use of forged invoices.

During investigation, it was found that the alleged persons represented to the complainants that their business method was unique and has all the approval of the FMC, police said.

The accused caused wrongful loss of Rs 7.5 crore to the three victims through complainant company and misappropriated the funds for its own use, police said.

The NSEL platform for spot trading was designed by the management of the exchange with assured return investment schemes.

It was also evident that officials of the NSEL were engaged in alluring and inducing clients, brokers and public at large to invest in commodity market through the NSEL being a fixed assured return platform, police said.

Police said that all the activities were illegal, unauthorised and nothing more than a ponzi scheme in the form of money circulation scheme.

"During investigation, a team was sent to Mumbai and accused Sinha was arrested," Joint Commissioner of Police (Economic Offences Wing) O P Mishra said.

During interrogation, the accused has disclosed that he used to report to Jignesh Shah who was the group MD and chairman of the NSEL.

Shah was very desperate to generate profit in the subsidiary companies. He devised introduction of new business concept in the NSEL even violating conditions of licence of the NSEL given by the Ministry of Consumer Affairs, Mishra said.

In a statement, an NSEL spokesperson said, "The NSEL crisis was an engineered crisis, though it was solvable, but it was not solved, with a view to throw 63 moons out of the exchange business. All the probe agencies, like ED, CBI, EOW-Mumbai and SFIO, have traced the entire money trail of Rs 5,600 crore to the 22 defaulting entities and its established that not a single penny has come to the NSEL, 63 moons or its founder."

"Even the Bombay High Court has observed that the entire money trail is with the 22 defaulting entities. Despite this, all targeted actions have been concentrated against NSEL, 63 moons and its founder, who are actually the biggest sufferers and victims. Despite such victimisation and motivated action, they have been trying to earnestly resolve the crisis," he said.

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)