The Enforcement Directorate (ED) has issued another summon
to Motilal Oswal, chairman and managing director of Motilal Oswal Financial
Services, rejecting his request to be represented by one of the directors of
the company.
The action taken after enforcement directorate asked him to
appear before it on August 8. According to media reports Investigating agencies
are inspecting broker’s role in the entire NSEL crisis and cross-verifying the
evidences.
The ED has summoned nine brokers for questioning in
connection with the National Spot Exchange Ltd (NSEL) money-laundering case.
This is the first time that heads of brokerages such as Motilal Oswal Financial
Services, India Infoline Commodities, Geofin Comtrade and Phillip Commodities
are being called for questioning. It is alleged that broking firms where
involved in misleading their clients. Recently, senior executives from broking
firms were arrested by Economic offences wings (EOW) Mumbai police, in client
code modifications. The names of clients on the NSEL servers were found to be
different from those on brokers’ records.
A year back EOW has also found fictitious transactions
executed by the brokers. It has been alleged that the Unique Client Code was
manipulated and in some instances modifications were done only at the brokers’
end.
The name of investors holding certain goods in NSEL records
and the broking house were different. In a few cases, client accounts were
sometimes used without their consent or knowledge. In one incident, a client
account was used to execute trade worth 1,061 crores without his consent.
The broking firms also allegedly indulged in short selling
and circular trading to artificially push up volumes on the exchange. The
investigating agency also suspects proprietary trading by brokers.
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