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Mumbai: The economic offences wing (EOW) of the Mumbai police on Monday filed its first chargesheet in the 5574.35 crore payment crisis at the National Spot Exchange Ltd (NSEL).

EOW has filed the chargesheet in a Mumbai court that hears cases related to the Maharashtra Protection of Interest of Depositors Act.

The agency has submitted a charge sheet of 9,000 pages against five key accused in the NSEL case, said Himanshu Roy, joint commissioner of Mumbai police.

The five accused are Anjani Sinha, former chief executive officer of NSEL; Amit Mukherjee and Jai Bahukhandi, former assistant vice presidents of business development and warehousing, respectively; Nilesh Patel, managing director of NK Proteins Ltd; and Arun Kumar Sharma, managing director of Lotus Refineries Ltd.

All of them are currently in judicial custody.

The chargesheet does not include Jignesh Shah, founder of Financial Technologies (India) Ltd, Joseph Massey and Shreekant Javalgekar. NSEL is a unit of Financial Technologies.

Javalgekar was a former managing director and CEO of MCX and Massey was a former managing director and chief executive officer of MCX Stock Exchange Ltd and a former director of MCX.

“The EOW charge sheet has been filed under Section 409 of CrPC (Code of Criminal Procedure) involving criminal breach of trust among others and each individual accused can be liable for 10 years of imprisonment under the law," said Roy.

He also said that Jignesh Shah the promoter of Financial Technologies (India) Ltd (FTIL) has not been given a clean chit in the case either. FTIL holds a 99.9% stake in NSEL.

Currently, the EOW chargesheet has named Jignesh Shah but has not accused him in the case so far.

“We believe that Shah is completely involved in the NSEL case and therefore EOW has secured court’s approval to further investigate the case under 173 (8) of criminal procedure code," Roy said.

According to Roy, this is the first chargesheet in the case and it will be followed by several others.

He also said EOW will issue look out notices against all the people named in the first information report in the NSEL case. Once the look out notices are issued, the involved people will not be allowed to leave the country without the permission of Mumbai police.

According to the EOW chargesheet, the agency has relied on 297 witness, including Pankaj Saraf, an investor in NSEL and the main complainant in the case.

The chargesheet contains a list of properties and accounts seized by EOW, a list of bogus warehouses of NSEL and the stocks secured by the agency.

The settlement crisis at NSEL came to light on 31 July when the exchange abruptly suspended trading in all but its e-series contracts. These, too, were suspended a week later.

The closure of trading may have been prompted by an instruction from the ministry of consumer affairs to the exchange asking it not to offer futures contracts. A spot exchange isn’t supposed to do so, but NSEL was doing that.

NSEL tried to implement the change, but because its appeal was to investors and members who were not interested in spot trades, it eventually had to suspend all trading.

It later emerged that all trading on NSEL happened in paired contracts, with investors, through brokers, buying a spot contract and selling a futures one for the same commodity.

The entities selling on spot and buying futures were planters or processors and members of the exchange. It turned out there were only 24 of them, and they used the paired contracts as a way to raise easy money.

When the trading was suspended, the investors were left holding contracts that the members couldn’t buy because they didn’t have the money to do so.

On 14 August, NSEL proposed a payout plan, but it has been unable to stick to the schedule and has not made a single successful payout ever since.

Details of the chargesheet:

Anjani Sinha (former managing director and CEO of NSEL)

Salary: not known

Responsibilities: He was involved in the day-to-day running of the business.

Main charges: Prime accused in the case. He received personal gains from borrowers for lending money to them. He is the brains behind the NSEL scam. He was the sole approving authority of loans to borrowers.

Amit Mukherjee (former assistant vice-president, business development, of NSEL)

Salary package: 22 lakh per year

He got 4 promotions in 8 years.

Responsibilities: He used to identify borrowers for lending.

Main charges : He acted in collusion with the borrowers. He received kickbacks of 12 crore from borrowers. He used to get companies which were not fit for loans.

Jai Bahukhandi (Former assistant vice-president, warehousing, NSEL)

Salary package: 20 lakh per annum

Responsibilities: To manage the warehouses of NSEL.

Main charges: created a false talk and bogus warehouses receipts. Received 5 crore in kickbacks from the management and promoters of NSEL.

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