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DELHI POLICE EOW NABS ANJANI SINHA MD OF NATIONAL SPOT EXCHANGE LTD FROM MUMBAI DUPING 5600 CRORES

January 18, 2021 09:46 PM

CASE OF CHEATING DONE UNDER THE DISGUISE OF COMMODITY TRADING BY ARRESTING ANJANI SINHA MD/CEO OF NSEL (NATIONAL SPOT EXCHANGE LTD.) WAS SOLVED ,   ALLEGED PERSONS INTRODUCED POLICIES IN VIOLATION OF THE INSTRUCTIONS OF FORWARD MARKET COMMISSION AND LURED THE INVESTORS BY ASSURING FIXED RETURNS AND DUPTD THEM OF CRORES OF RUPEES. THE EXCHANGE IS INVOLVED IN 5600 CRORE PAYMENT DEFAULT AND TRADING FICTITIOUS COMMODITIES.  

  New Delhi (Face2News)

Economic Offences Wing, Delhi Police reported to have arrested Anjani Sinha from Mumbai on Sunday , in case FIR No 24/2015 of PS EOW.  

The present case was registered on the complaint of Sh. Ashvin J. Shah. Complaints of Sh. Jatinder Kumar Ahuja and Sh. Sayed Habib-Ur-Rehman have also been received and clubbed into the investigation of this case. Complainants alleged that the brokerage Firm M/s 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 have alleged that they were induced by the Directors of the above noted company to invest in commodity market which is undertaken by them as Trading & Clearing Member of NSEL, presenting it to be completely safe, as being regulated by the Govt. authorities. Being the member of the Exchange, the alleged broker was to ensure that at the time of issuing the delivery order, the seller of the commodity satisfies his clearing member that he owns and holds adequate stocks of the required commodity.

The Trading cum Clearing Member has to ensure that the commodities purchased by the clients/investors through contracts were delivered to the NSEL certified warehouses. The Ware House Receipts were to be delivered by the Member to its clients at the time of the settlement of the contracts. The alleged broker in collusion and conspiracy with the Exchange (NSEL) and the sellers (Trading Members) did not collect the Delivery Orders and the Ware House Receipts whereas the transactions were done on behalf of the complainants.

Jignesh Shah approved the trading of Castor Seed on long term contracts i.e. T+2 to T+36. Thereafter, several other commodities were allowed to be traded on NSEL on long term contracts basis such as Steel, Sugar, Cotton, Mustard Seed etc. Already till 2012, about 500 brokers were registered as Trading Members and this company started generating Rs.26 Crores profit in the year 2011-2012. But Jignesh Shah introduced new trading commodities mainly Sugar to deal with assured return scheme. The companies namely Brinda Commodity Pvt. Ltd., Mohan India Pvt. Ltd. and Taveshi Enterprises Pvt. Ltd. were contacted through one Jai Shankar Shrivastav who was ready to give 16% annual return on the investment under the colour of sale purchase of sugar.  

It is alleged that fictitious stocks were traded on the Exchange as a result of which the settlement of contracts was not done on the day of maturity, causing loss to the complainants. The alleged broker had represented to the complainants that NSEL is a national level electronic, transparent and institutionalized spot market which provides counter party guarantee in respect of all trades and which is regulated by Forward Markets Commission (FMC). As per the complainants, the loss of Rs. 7.96 Crore incurred by them were caused mainly on the trading done between 12.07.2013 to 13.08.2013 when NSEL deferred the settlement of contracts by 15 days.

Dr. O.P. Mishra ,Joint Commissioner of Police, EOW, said, complainants has alleged broker Integrated Commodity Traders Pvt. Ltd., NSEL, its CMD Jignesh Shah, CEO Anjani Sinha and other Key Managerial Personnel for cheating, criminal misappropriation and use of forged Invoices. Besides commodity seller companies, who purportedly sold the commodities, have also been accused in the complaint.

Team: - A team consisting of ACP Sh. Virender Sajwan, Inspr. Gurmail Singh and SI Gulshan Yadav was formed under the overall supervision of DCP/EOW Mohd. Ali, IPS to nab the accused persons. 

During investigation, documents pertaining to their investment in commodity trading through NSEL (National Spot Exchange Ltd) through which they lured the complainants were checked and scrutinized. The study of these documents showed that alleged persons represented to the complainant that their business method is unique and has all the approval of the Forward Markets Commission (FMC). Alleged made following representations. 

i) It was represented that it provides a transparent common Indian market offering compulsory delivery based spot contracts in various agricultural and non-agricultural commodities. And again, under the heading Objectives, it was represented that the main objective of NSEL is to develop a vibrant electronic spot market in various commodities with the idea to reduce cost of intermediation and create an electronic linkage between buyers and sellers across the country. The Exchange provides counterparty guarantee in terms of quantity, quality and payment. Hence, the participants get a safety net against credit risk and counter party default.

ii) Further, under the Heading Regulatory Framework, it was represented that NSEL commenced operations pursuant to the Gazette Notification dated June 5, 2007 issued by the Ministry of Consumer affairs, Govt of India allowing it to conduct trading in commodities. And it was further represented that Govt has issued order dated February 6, 2012 to appoint Forward Market Commission as the monitoring agency to overview the functioning of NSEL. While in fact, vide this notification, the Govt of India under section 27 of Forward Contract Regulation Act, 1952 exempted all forward contacts of one day duration for the sale and purchase of commodities traded on NSEL from the provisions of the said act. This was subject to two key conditions being: (i) No short sale by the members of the exchange shall be allowed. (ii) All outstanding positions of the trade at the end of the day shall result in delivery.

Thus from the above mentioned representations given by the NSEL, it is apparent that the officers of the exchange misrepresented before the brokers, clients and public at large that this exchange is authorized/allowed by FMC, Govt of India, to conduct future trades and all contracts provided by the exchange are risk free and warehouse receipt financing and negotiable warehouse receipts is a genuine business, whereas all such contracts were never authorised/allowed by the Ministry of Consumer Affairs, Govt of India to be executed on NSEL platform. And the representation that Exchange maintains a settlement guarantee fund, notwithstanding default of any member, payout is honoured as per the Exchange Schedule was merely an inducement.

Further during investigation Forensic Audit Report dated 25.9.2013 pertaining to the affairs of NSEL was collected along with relevant documents from M/s Grant Thornton India LLP, which was carried out on the request of Forward Market Commission. On perusal of the report, emerged that:

NSEL started its operations in October, 2008 with the exemption from Forward Contracts Regulation Act, 1952. As per this authorisation, NSEL would conduct trading in T+1 contracts, which would imply that if the buyer purchased a commodity on the exchange, the dues would be paid within a day and the buyer would take delivery of the stock, the following day.

However, in 2009, the board of Directors of NSEL approved contracts with a long term settlement period i.e. beyond a period of 11 days in Contravention of Forward Contract Regulation Act, 1952. The same is evident from the Minutes of the Board dated 16.11.2009 and 19.12.2009. In both these meetings the company started trading in T+18, T+25 and T+36 contracts. Further on analysis of the Minutes of the meeting of the Board, it is found that accused Jignesh Shah along with four other directors are present in the Board when these long term contracts were approved.

During the course of investigation, it is found that NSEL platform for spot trading was designed by the management of the exchange with assured return investment schemes. Further it is also evident that the officials of the NSEL were engaged in alluring and inducing the clients/brokers and public at large to invest in commodity market through NSEL being a fixed assured return platform. It is worth mentioning here that all the activities are illegal, unauthorized and nothing more than a ponzi scheme in the form of money circulation scheme.

Accused persons caused wrongful loss of Rs.7.5 Crore to 3 complainants/ victims through Complainant Company and misappropriated the funds for its own use. It is also worth mentioning here that the NSEL has caused a gross total fraud of Rs.5600 Crores to 13000 victims.

Cases registered against NSEL and its officers and conspirators: FIR No 89/13 (CR No. 216/13) dated 30.09.11 u/s 120B/409/465/ 467/468/471/474/477A IPC P.S. MRA Marg, Mumbai (EOW)., FIR No SM2014E0001 dated 12.02.14 U/s 120B/409/420/467/ 468/471/474 IPC 13(1) & 13(2) POC Act P.S. CBI BS&FC/ CBI Mumbai,  FIR No. 331/14 dated 13.08.14 U/s 406/409/420/467/468/ 471/120B IPC P.S. Roop Nagar, Delhi, FIR No. 24/15 dated 23.02.15 U/s 406/409/467/471/120B IPC P.S. EOW Delhi, FIR No. 86/15 dated 27.06.15 U/s 406/409/420/120-B IPC PS EOW Delhi,FIR No. 90/15 dated 24.07.15 U/s 406/420/468/471/120-B IPC PS Barahkhamba Road Delhi

MODUS OPERANDI: The NSEL platform for spot trading was designed by the management of the exchange with assured return investment schemes. Further it is also evident that the officials of the NSEL were engaged in alluring and inducing the clients/brokers and public at large to invest in commodity market through NSEL being a fixed assured return platform. This is worth mentioning here that all the activities are illegal, unauthorized and nothing more than that a ponzi scheme in the form of money circulation scheme.

ARREST:-During investigation, efforts were made to find out the present whereabouts of all the accused persons. A team was sent to Mumbai and accused Anjani Sinha was arrested after conducting raids at various hideouts. During the interrogation accused has disclosed that he used to report to Jignesh Shah who was the group MD and Chairman. Jignesh 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 NSEL given by Ministry of Consumer affairs, Govt. of India.

Initially in 2009, Jignesh Shah approved the trading of Castor Seed on long term contracts i.e. T+2 to T+36. Thereafter, several other commodities were allowed to be traded on NSEL on long term contracts basis such as Steel, Sugar, Cotton, Mustard Seed etc. Already till 2012, about 500 brokers were registered as Trading Members and this company started generating Rs.26 Crores profit in the year 2011-2012. But Jignesh Shah introduced new trading commodities mainly Sugar to deal with assured return scheme. The companies namely Brinda Commodity Pvt. Ltd., Mohan India Pvt. Ltd. and Taveshi Enterprises Pvt. Ltd. were contacted through one Jai Shankar Shrivastav who was ready to give 16% annual return on the investment under the colour of sale purchase of sugar. This created a huge business volume on daily basis on NSEL platform and this also raised the annual profit of the company to Rs.125 crores during the year 2012-13. 

PROFILE OF THE ACCUSED:  Accused is a charted accountant by profession and he was associated with the alleged company NSEL since inception and in the year-2012 he was appointed as MD/CEO of the firm. He was getting an annual salary of Rs.1.80 Crore during his stint as CEO in the year-2013. He managed day to day functioning of companies and was responsible for cheating caused to the complainant. The accused was produced in Borivali court in Mumbai and has been granted transit remand. He is being brought to New Delhi for production in the jurisdictional Court. Further investigation is in progress.

 
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