BackPIL against NSEL seeks CBI probe, alleges Rs8,000 crore scam
PIL alleges that NSEL forged or manipulated documents regarding stocks and liquidity
Premium(Abhijit Bhatlekar/Mint)
Mumbai: A public interest litigation (PIL) has been filed in the Bombay high court seeking a CBI probe into the alleged refusal by National Spot Exchange Ltd. (NSEL) to pay dues to 17,000 small investors, claiming it is a scam to the tune of Rs8,000 crore.
Former Bharatiya Janata Party (BJP) Member of Parliament (MP) and president of Investors’ Grievances Forum Kirit Somaiya has filed the petition.
The respondents named in the PIL include Union ministry of consumer affairs, food and public distribution, ministry of finance, Forward Markets Commission (FMC), Central Board of Direct Taxes (CBDT), the beleaguered NSEL, and its promoter Jignesh Shah.
The PIL contends that NSEL’s role was to bring farmers and buyers together by eliminating middlemen but it forged/manipulated documents regarding stocks and liquidity and allowed some of the companies to pledge the same stock with more than one financial institutions.
Somaiya has sought a probe by the CBI or the Economic Offences Wing of Mumbai Police or the Central Vigilance Commission (CVC), and demanded action against NSEL, its promoters and 24 companies which it says have disappeared along with Rs8,000 crore.
The crisis at NSEL would have a cascading effect on other exchanges run by the same promoters, namely MCX and MCX-SX, the PIL says. Government officials, politicians and NSEL connived to cheat the investors, it alleges.
The PIL also seeks that NSEL’s licence be cancelled and it be restrained from carrying on the operations until it pays the dues of the investors.
According to the petition, NSEL had stated that it had a settlement guarantee fund of Rs830 crore, however recently it disclosed that it had only Rs60 crore in this fund.
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