Trading Clients Registered Fresh Complaint

Brokers involvement in misguiding clients was raised by few clients such as Moti Dadlani ,Rita Vadodaria, and Achal Agarwal. On 18^th March 2015, Rita Vadodaria, client of Anand Rathi Commodities registered a fresh complaint against Anand Rathi Commodities.

Mr. Dadlani lodged a complaint against his broker and has alleged that his broker has defrauded money under his name. The broker deceptively; used Mr. Dadlani account and PAN details to invest huge amounts on NSEL.

As per media reports, ED said that they are examining the broker’s role in the entire case and asked them to furnish the details of funding of clients through non-banking financial companies and their unexplained write-offs.

The Investigating agencies are enquiring about the illegal changes made on the NSEL platform.  NSEL alleged in their charge sheet that the brokers were involved in miss selling products of NSEL by deceiving their clients on the NSEL platform were found to be different from those on brokers’ records

Two years ago, three executives of leading brokerage firms Anand Rathi Financial Services, Geofin Comtrade and India Infoline were arrested by the economic offences wing of Mumbai police, and were later released on bail.

The ED registered a criminal case under the PMLA Act in 2013, to probe the case. So far, it has made an attachment of Rs 800 crore in the case. A supplementary charge sheet could be expected

Aastha Group Barred by SEBI for their Association with Radford Global

Aastha Group is an Indian based MNC with its presence across the
globe. Juggernaut projects also a part of the Aastha Group. It’s a
first generation business group. The company has business interest in
diverse sectors namely steel, minerals, energy, agro, IT and
education. The Aastha website presently lists only Aastha Minmet and
Aastha Alloycrop as a part of the group.




Mohit Aggarwal, Managing Director of the Aastha Group, and Shilpa
Aggarwal, a Director with the Aastha Group, have been barred by SEBI
for their association with Radford Global. They were part of a list of
260 entities related to First Financial Services and Radford Global.
Data from an exchange-sponsored registry of regulatory orders,
watchoutinvetors.com shows that the names of Mohit Aggarwal also
figured in the NSEL payment crises. The amount involved has been
secured at Rs. 485 crores. The Director of the group admitted
contracts which were launched on the NSEL portal without any physical
stock in NSEL warehouses.


According to the reports ED attached Aastha Group’s properties in
Thane and Mumbai under PMLA. Investigations against the other
defaulters and brokers are ongoing. The ED conducted searches in
Mumbai and Bangalore on various premises of Aastha Minmet India and
Juggernaut projects under the Prevention of Money Laundering Act,
2002. Aastha Minmet Pvt. Ltd. and Juggernaut Projects are among the
major defaulters in the National Spot Exchange Limited case. The group
is alleged to have defaulted to the tune of Rs. 250 crores in the
crisis.

NSEL is Successfull In Making Recovery Efforts

In the Final Merger order, it has been acknowledged that the monies are to be recovered from the NSEL defaulters. If that is so, then it is difficult to fathom what purpose would be served by amalgamating NSEL with FTIL instead of pursuing the  NSEL defaulters. The answer comes in the Final Order, which states that the merger is aimed at speedy recovery of dues from the NSEL defaulters by utilizing FTIL’s resources well, if that is the sole objective then the merger is not the right solution.

Further, although the final order has failed to demonstrate how merging NSEL with FTIL will achieve the recovery of dues since even the resulting merged entity will continue to pursue recovery suits against the NSEL defaulters. Currently, NSEL is anyways pursuing the same with the full financial support of FTIL for legal expenses.

Recovery Efforts by NSEL

When the merger was being forced on FTIL to ensure recovery from 22 defaulters, the MCA should have considered that Rs.542 crore has already been paid off. It is incorrect to state that the process of recovery of dues by NSEL is very slow. There have been several positive developments in the last two years, which establish that NSEL’s recovery has been speedy and efficient; for instance

1.       NSEL has been successful in obtaining decress on admission against five defaulters from the Bombay High Court, to the tune of Rs. 1,233.02 crores

2.       NSEL successfully obtained injunctions against the assets of 18 NSEL defaulters from the Bombay High Court in respect of claims of Rs. 4,515.93 crores

3.       A significant part of the entire claim has therefore, been secured and Rs. 542.99 cores is already paid by NSEL

4.       The economic Offences Wing (EOW) has attached assets worth more than Rs. 6,000 crores belonging to NSEL defaulters

5.       The Enforcement Directorate (ED) also attached the assets of NSEL defaulters worth Rs. 837.01 Cr. On the basis of the money trail

6.       In view of the forgoing, more than 100% of  the claims of the traders  are secured by way of injunction ,decree & attachments against the NSEL defaulters.

Arun Sharma Of Lotus Refineries Enjoying On NSEL Defaulted Money

Lotus Refineries Pvt Ltd. its one of the manufacturers and marketer of a wide range of edible oil products, with annual turnover of Rs.2000 Cr. The LR-Active Oil, flagship brand of LR Active, holds varieties of product extensions under the LR Active brand. The units of Lotus Refineries are located at various locations in India such as Mumbai, Chandigarh & Ludhiana. The group is run by Arun Kumar Sharma & Prashant Kumar Anand, the Chairman & the MD of Lotus Refineries Pvt Ltd. In the recent NSEL  5,600 Cr. crisis, Lotus Refineries was one of the notable defaulter owing Rs.252.48Cr.

Arun Sharma took the money from NSEL and diverted that money to fulfill his peculiar necessities. The owing monies were diverted in real estate projects, adorning offices and financing Bollywood films. Besides being a Businessman Arun Sharma also finance Bollywood films.  He is a well-known entity among celebrities and has a close relationship with many famous celebrities; he is also the financier of movie Satya-2 & Dehradun diary, produced under the banner Mammoth Media Entertainment Pvt Ltd. and LR Media.

Investigation agencies had arrested Arun Kumar Sharma on 11 November 2013 however he was released on 11 February 2014. Maharashtra Protection of Interest of Depositors (MPID) court had ordered to transfer Rs.12.74 crore from 27 bank accounts of Lotus Refineries Pvt Ltd to the account of competent authority.

It is also interesting to know that there were noticeably 8 Defaulting groups holding a whopping 85% of total amount. The magnitude of the amount of deception by these defaulters is inconceivable. The amount total default by them alone is around Rs.4819.87 crores.

After 3 years of NSEL crisis, defaulter Lotus Refineries who have the default due amount are still roaming Scot-free, . These defaulters diverted the trading clients’ money into parallel businesses, instead of returning the outstanding dues. These defaulters are enjoying on the defaulted money. Strict action should be taken against these defaulters to recover lost dues.

Mohan India Promoters Enjoying Lavish Lifestyle on Defaulted Money

Delhi based Mohan India and its sister concern Tavishi Enterprises- led by Jagmohan Garg & J.S Srivastava as company’s director’s, are promoted by an influential business family from north-west Delhi. The group is one of the Defaulters in the NSEL case.

As per media reports , the company had bought  2,16,324 tonnes of sugar for Rs 605.2 crore during the year 2011-12.The total earned profit was approximately Rs.2,044 crore. During the recent NSEL crisis, Mohan India Group was one of the major defaulters of NSEL crisis. Close to Rs. 600 crore, out of Rs. 852 crore that they got, were paid to several unrelated bodies and  about Rs. 200 crore to related entities.

More appallingly, Jagmohan Garg,  had diverted investors monies to several ventures. Such as the five 5-star hotel – Radisson and,- real estate properties viz. Mera Baba Reality projects in Pitampura and Rohini and a lot more. Jagmohan Garg swindled these funds from these known related entities to unrelated entities.

As per Media reports, it is also said that the money was siphoned off after having been laundered. What emanated out of it was that all the money was directed to the political leaders, those who backed them. In October, 2013, Mohan India agreed to pay Rs.771 crore as final settlement, out of its combined obligation and the deal safeguarded by asset mortgages and penal clauses for the delayed payment obligations.

At present Mohan India is one of the largest defaulters of NSEL and Mr. Jagmohan Garg and Jai Shankar Srivastava have yet to honor their obligation. These habitual defaulters are using their clout to safeguard their ill-gotten assets from money laundered through the Exchange. But the law is catching up fast with such financial criminals and justice should be delivered soon.

P.D Agro Siphoned Off Defaulted Money in Real Estate

Haryana based PD Agro Pvt Ltd., promoted by Mr. Surender Gupta and wife Sheetal Gupta, owns a popular brand called ‘DUNAR’ rice. The brand ‘DUNAR’ is a well established brand in the market. In the name of ‘DUNAR’, the company delivers a range of basmati rice products across the globe. The brand is endorsed by celebrity couple Anupam Kher and Kiron Kher on T.V.C .Having said all this, it is shocking to know that PD Agro is the third largest defaulter of Rs.674.05 cr. in the NSEL case. The firm, traded on the exchange on behalf of Dunar Foods Ltd., PD Agro Pvt Ltd is accused in several  cases by various investigating agencies. The Investigating officers of ED, EOW , Mumbai Police are already in action. The Enforcement Directorate (ED) has attached properties worth Rs. 50 crore of a defaulting firm in connection with its money laundering probe in National Spot Exchange Ltd (NSEL) crisis.

Sheetal Gupta

According to various media reports ED had identified the assets and immovable properties of the firm after it searched few premises and went through the records prepared by the Mumbai Economic Offence Wing (EOW) prepared in this regard. The ED had registered a case under the Prevention of Money Laundering Act (PMLA)  to probe laundering charges against the officials of the stock exchange and other individuals. On March 7, 2014, The economic offenses wing (EOW) arrested Surendra Gupta, MD of Dunar Food, for his alleged role in the Rs 5,600 crore NSEL crisis.

The ED official said, "Our investigations have revealed that more than Rs.30 crores were siphoned off in order to purchase a real estate project namely Prime City developed by Prime Zone Developers Pvt Ltd at Assand, District - Karnal." "Investigations also revealed that P D Agro diverted NSEL investor funds to Dunar Foods. Funds to the tune of Rs.300 crores have been found to be channelized into the business activities of Dunar Foods, mainly for purchase of paddy and for servicing the existing loans," said the ED official. Sheetal Gupta was trying to escape to Dubai from Delhi airport on 9th Feb 2015, where she was  detained by Mumbai EOW for further Investigations. She was later brought to Mumbai and is apparently the first women to be arrested among the 24 NSEL Defaulters.

3 Top Brokers Involved in Manipulating Trading Volumes in NSEL

The Economic Offences Wing (EOW) of Mumbai crime branch has mapped out the nature of the crimes committed by the 3 brokers arrested in the Rs 5,600 crore, National Spot Exchange Limited (NSEL) crisis. EOW investigations reveal that the 3 brokers, who were arrested on March 3, had allegedly given false information to investors and auditors of NSEL, and also allegedly traded on their clients' names without taking permission. In this way, these brokers had manipulated the trading volumes of the NSEL.

The EOW arrested Amit Rathi, Director of Anand Rathi Commodities Limited (ARCL); Cherassary Krishnan, Director of Geofin Comtrade; and Chintan Modi, Director of India Infoline Commodities Limited- 3 major brokers in the city.

How Anand Rathi Commodities Ltd. distorted facts?

As per media reports, Anand Rathi Commodities (ARCL) started trading on the NSEL platform in 2009, and presently has 12,900 clients. In the past four years, (ARCL) traded worth Rs 19,130.2 crore, which is around 16% of the overall turnout on the NSEL platform. It was also revealed during the investigation that ARCL had falsely assured investors that they (ARCL) had done the due diligence, and there were enough settlement guarantee funds, thus enticing them to invest in the NSEL products. (ARCL) also acted as clearing and forwarding agents, and gave NSEL auditors deceitful information that there were adequate goods in the warehouses. They should have carried out all the checks that were needed about availability of the stocks to protect the interest of their investors, but instead they gave them wrong information. Investigating officers believe that there was a connection between the defaulted members in the case and ARCL, based on some transactions that point towards such connections. EOW investigators also believe that ARCL masqueraded as its client to do large deals (this is known as UCC manipulation).  UCC manipulation (masquerading) was done rampantly from two conduit accounts without the consent of the account holder and commodities were bought without the consent of the clients, leading to unfair trade practices. Investigating officers suspect that ARCL carried out suspicious transactions of funding through multiple accounts, and to increase the volumes on NSEL platform, indulged in circular trading by transferring funds into various accounts of their own employees and relatives.

The court noted that Rathi was an authorized signatory to the bank accounts of ARCL and participated in board meetings, as per Economic Offences Wing (EOW) report. As per media reports, it is clear that Amit Rathi was fully aware of the notorious act and it sounds very suspicious that, Mr. Amit Rathi couldn’t whiff this. If Mr. Amit Rathi went scot-free then this will not only cause adversely effect on investors, but it will promote this unethical trade practices in the future.

ED attached Aastha Group’s properties in Thane and Mumbai under PMLA

Astha Group is an Indian based MNC with its presence across the
globe. Juggernaut projects also a part of the Aastha Group. It’s a
first generation business group. The company has business interest in
diverse sectors namely steel, minerals, energy, agro, IT and
education. The Aastha website presently lists only Aastha Minmet and
Aastha Alloycrop as a part of the group.

Mohit Aggarwal, Managing Director of the Aastha Group, and Shilpa
Aggarwal, a Director with the Aastha Group, have been barred by SEBI
for their association with Radford Global. They were part of a list of
260 entities related to First Financial Services and Radford Global.
Data from an exchange-sponsored registry of regulatory orders,
watchoutinvetors.com shows that the names of Mohit Aggarwal also
figured in the NSEL payment crises. The amount involved has been
secured at Rs. 485 crores. The Director of the group admitted
contracts which were launched on the NSEL portal without any physical
stock in NSEL warehouses.


According to the reports ED attached Aastha Group’s properties in
Thane and Mumbai under PMLA. Investigations against the other
defaulters and brokers are ongoing. The ED conducted searches in
Mumbai and Bangalore on various premises of Aastha Minmet India and
Juggernaut projects under the Prevention of Money Laundering Act,
2002. Aastha Minmet Pvt. Ltd. and Juggernaut Projects are among the
major defaulters in the National Spot Exchange Limited case. The group
is alleged to have defaulted to the tune of Rs. 250 crores in the
crisis.

NSEL Successfully Recovered Rs.28.33 crore and is Awaiting For HCC Orders

The National Spot Exchange Ltd (NSEL) has claimed that the Economic Offences Wing of the Mumbai Police has attached assets worth around Rs.5,000 crore of defaulting brokers. The spot exchange was shut down in August 2013 following a Rs.5,600 crore payment crisis.

NSEL have already secured recoveries worth Rs.1,233.02 crore by way of decrees on admission against five defaulters and through injunctions from a total of 18 defaulters with outstanding of Rs.4,515.93 crore. The EOW has attached assets worth around Rs.5,000 crore of defaulting trading members.

Authorities had in March issued public notices to sell properties of three defaulters—Swastik Overseas Corporation and Ferrochrome of Metkore Alloys & Industries, and Red Chilly & Black Pepper, part of Shree Radhey Trading. The Enforcement Directorate also attached assets worth around Rs.800 crore of defaulting traders

With regards to the sale of properties of major defaulter Mohan India Group, the sessions court has appointed Knight Frank as consultant to bring in quality buyers.

The sessions court order assumes significance as it would expedite liquidation of NSEL defaulters’ properties and pay dues of around 11,000 investors. Being a global real estate consultant, Knight Frank is expected to bring individual and corporate clients with high bids.

The spot exchange, which is fighting a court battle against the government order to merge it with FTIL, claimed that out of 24 defaulting traders, two with outstanding of Rs.195.75 crore have almost cleared their dues. NSEL has disbursed Rs.542.99 crore to brokers, which includes loan from FTIL.

Earlier, NSEL had settled the e-series contracts outstanding up to 98.48% by disbursing Rs.298.52 crore to around 40,000 e-series units holders directly after the Bombay high court constituted a three-member committee to oversee the recovery and payback process.

On the recovery progress, NSEL has recovered Rs.28.33 crore and is awaiting orders from the high court committee to distribute the money to genuine trading clients.

JS Srivastava Of Mohan India Diverted Funds In Several Ventures

Delhi based Mohan India and its sister concern Tavishi Enterprises- led by Jagmohan Garg & J.S Srivastava as company’s director’s, are promoted by an influential business family from north-west Delhi. The group is one of the Defaulters in the NSEL case.

As per media reports , the company had bought  2,16,324 tonnes of sugar for Rs 605.2 crore during the year 2011-12.The total earned profit was approximately Rs.2,044 crore. During the recent NSEL crisis, Mohan India Group was one of the major defaulters of NSEL crisis. Close to Rs. 600 crore, out of Rs. 852 crore that they got, were paid to several unrelated bodies and  about Rs. 200 crore to related entities.

More appallingly, Jagmohan Garg,  had diverted investors monies to several ventures. Such as the five 5-star hotel – Radisson and,- real estate properties viz. Mera Baba Reality projects in Pitampura and Rohini and a lot more. Jagmohan Garg swindled these funds from these known related entities to unrelated entities.

As per Media reports, it is also said that the money was siphoned off after having been laundered. What emanated out of it was that all the money was directed to the political leaders, those who backed them. In October, 2013, Mohan India agreed to pay Rs.771 crore as final settlement, out of its combined obligation and the deal safeguarded by asset mortgages and penal clauses for the delayed payment obligations.

At present Mohan India is one of the largest defaulters of NSEL and Mr. Jagmohan Garg and Jai Shankar Srivastava have yet to honor their obligation. These habitual defaulters are using their clout to safeguard their ill-gotten assets from money laundered through the Exchange. But the law is catching up fast with such financial criminals and justice should be delivered soon.

NSEL Had Settled The E-series Contracts Outstanding Up To 98.48%

The National Spot Exchange Ltd (NSEL) has claimed that the Economic Offences Wing of the Mumbai Police has attached assets worth around Rs.5,000 crore of defaulting brokers. The spot exchange was shut down in August 2013 following a Rs.5,600 crore payment crisis.

NSEL have already secured recoveries worth Rs.1,233.02 crore by way of decrees on admission against five defaulters and through injunctions from a total of 18 defaulters with outstanding of Rs.4,515.93 crore. The EOW has attached assets worth around Rs.5,000 crore of defaulting trading members.

Authorities had in March issued public notices to sell properties of three defaulters—Swastik Overseas Corporation and Ferrochrome of Metkore Alloys & Industries, and Red Chilly & Black Pepper, part of Shree Radhey Trading. The Enforcement Directorate also attached assets worth around Rs.800 crore of defaulting traders

With regards to the sale of properties of major defaulter Mohan India Group, the sessions court has appointed Knight Frank as consultant to bring in quality buyers.

The sessions court order assumes significance as it would expedite liquidation of NSEL defaulters’ properties and pay dues of around 11,000 investors. Being a global real estate consultant, Knight Frank is expected to bring individual and corporate clients with high bids.

The spot exchange, which is fighting a court battle against the government order to merge it with FTIL, claimed that out of 24 defaulting traders, two with outstanding of Rs.195.75 crore have almost cleared their dues. NSEL has disbursed Rs.542.99 crore to brokers, which includes loan from FTIL.

Earlier, NSEL had settled the e-series contracts outstanding up to 98.48% by disbursing Rs.298.52 crore to around 40,000 e-series units holders directly after the Bombay high court constituted a three-member committee to oversee the recovery and payback process.

On the recovery progress, NSEL has recovered Rs.28.33 crore and is awaiting orders from the high court committee to distribute the money to genuine trading clients.

Mohan India is one of the largest defaulters of NSEL

Delhi based Mohan India and its sister concern Tavishi Enterprises- led by Jagmohan Garg & J.S Srivastava as company’s director’s, are promoted by an influential business family from north-west Delhi. The group is one of the Defaulters in the NSEL case.

As per media reports , the company had bought  2,16,324 tonnes of sugar for Rs 605.2 crore during the year 2011-12.The total earned profit was approximately Rs.2,044 crore. During the recent NSEL crisis, Mohan India Group was one of the major defaulters of NSEL crisis. Close to Rs. 600 crore, out of Rs. 852 crore that they got, were paid to several unrelated bodies and  about Rs. 200 crore to related entities.

More appallingly, Jagmohan Garg,  had diverted investors monies to several ventures. Such as the five 5-star hotel – Radisson and,- real estate properties viz. Mera Baba Reality projects in Pitampura and Rohini and a lot more. Jagmohan Garg swindled these funds from these known related entities to unrelated entities.

As per Media reports, it is also said that the money was siphoned off after having been laundered. What emanated out of it was that all the money was directed to the political leaders, those who backed them. In October, 2013, Mohan India agreed to pay Rs.771 crore as final settlement, out of its combined obligation and the deal safeguarded by asset mortgages and penal clauses for the delayed payment obligations.

At present Mohan India is one of the largest defaulters of NSEL and Mr. Jagmohan Garg and Jai Shankar Srivastava have yet to honor their obligation. These habitual defaulters are using their clout to safeguard their ill-gotten assets from money laundered through the Exchange. But the law is catching up fast with such financial criminals and justice should be delivered soon.

Brokers Found Guilty in Luring their Clients

An audit ordered by the Securities and Exchange Board of India (Sebi) of brokers involved in the 2013 payments crisis at the National Spot Exchange Ltd (NSEL) has found that they mis-sold NSEL products, said three persons familiar with the development, including a Sebi official.



The regulator has indicated this to third-party auditors looking at the books of these brokers. Sebi had on April 4 given the brokerages 60 days' time to have their books vetted by third-party auditors.The examination of the NSEL brokers is complete and Sebi has written to the department of economic affairs in the finance ministry. The brokerages include Anand Rathi Commodities, India Infoline Commodities, Geofin Comtrade, Phillip Commodities and Motilal Oswal Commodities.

There were several irregularities found, which included instances of contract notes issued by brokers not matching trade records of the exchange. Instances of discrepancies and manipulation of books of accounts need to be verified further. This can be done by a forensic audit of banking transactions made between brokers and clients.

The NSEL crisis came to light in July 2013, when the National Spot Exchange(NSEL) was unable to repay so called 13,000 trading clients, who were trading on the platform. The National Spot Exchange (NSEL) did not have adequate goods in its warehouses as promised by brokerage firms to their clients. Nor, did the settlement guarantee fund have enough money for repayment.

The audit was performed on the books of accounts of Anand Rathi Financial Services Ltd (Rs.629 crore), India Infoline Commodities Pvt. Ltd (Rs.326 crore), Geojit Comtrade Ltd (Rs.313.25 crore), Motilal Oswal Commodities (Rs.263 crore) and Phillip Commodities (Rs.140 crore). 

Fraud Brokers used UCC modifications of their clients

Brokers involvement in misguiding clients was raised by few clients such as Moti Dadlani ,Rita Vadodaria, and Achal Agarwal. On 18^th March 2015, Rita Vadodaria, client of Anand Rathi Commodities registered a fresh complaint against Anand Rathi Commodities.

Mr. Dadlani lodged a complaint against his broker and has alleged that his broker has defrauded money under his name. The broker deceptively; used Mr. Dadlani account and PAN details to invest huge amounts on NSEL.

As per media reports, ED said that they are examining the broker’s role in the entire case and asked them to furnish the details of funding of clients through non-banking financial companies and their unexplained write-offs.

The Investigating agencies are enquiring about the illegal changes made on the NSEL platform.  NSEL alleged in their charge sheet that the brokers were involved in miss selling products of NSEL by deceiving their clients on the NSEL platform were found to be different from those on brokers’ records

Two years ago, three executives of leading brokerage firms Anand Rathi Financial Services, Geofin Comtrade and India Infoline were arrested by the economic offences wing of Mumbai police, and were later released on bail.

The ED registered a criminal case under the PMLA Act in 2013, to probe the case. So far, it has made an attachment of Rs 800 crore in the case. A supplementary charge sheet could be expected

Aastha Minmet India and Juggernaut projects under the Prevention of Money Laundering Act

Aastha Group is an Indian based MNC with its presence across the
globe. Juggernaut projects also a part of the Aastha Group. It’s a
first generation business group. The company has business interest in
diverse sectors namely steel, minerals, energy, agro, IT and
education. The Aastha website presently lists only Aastha Minmet and
Aastha Alloycrop as a part of the group.




Mohit Aggarwal, Managing Director of the Aastha Group, and Shilpa
Aggarwal, a Director with the Aastha Group, have been barred by SEBI
for their association with Radford Global. They were part of a list of
260 entities related to First Financial Services and Radford Global.
Data from an exchange-sponsored registry of regulatory orders,
watchoutinvetors.com shows that the names of Mohit Aggarwal also
figured in the NSEL payment crises. The amount involved has been
secured at Rs. 485 crores. The Director of the group admitted
contracts which were launched on the NSEL portal without any physical
stock in NSEL warehouses.


According to the reports ED attached Aastha Group’s properties in
Thane and Mumbai under PMLA. Investigations against the other
defaulters and brokers are ongoing. The ED conducted searches in
Mumbai and Bangalore on various premises of Aastha Minmet India and
Juggernaut projects under the Prevention of Money Laundering Act,
2002. Aastha Minmet Pvt. Ltd. and Juggernaut Projects are among the
major defaulters in the National Spot Exchange Limited case. The group
is alleged to have defaulted to the tune of Rs. 250 crores in the
crisis.

Brokers Deceptively Used Client Details in NSEL

The Enforcement Directorate (ED) had issued summoned to Nirmal Jain, the chairman and managing director of India Infoline Finance (IIFL) group, for questioning in connection with the National Spot Exchange Ltd (NSEL) money-laundering case.

Brokers involvement in misguiding clients was raised by few clients such as Moti Dadlani ,Rita Vadodaria, and Achal Agarwal. On 18^th March 2015, Rita Vadodaria, client of Anand Rathi Commodities registered a fresh complaint against Anand Rathi Commodities.

Mr. Dadlani lodged a complaint against his broker and has alleged that his broker has defrauded money under his name. The broker deceptively; used Mr. Dadlani account and PAN details to invest huge amounts on NSEL.

As per media reports, ED said that they are examining the broker’s role in the entire case and asked them to furnish the details of funding of clients through non-banking financial companies and their unexplained write-offs.

The Investigating agencies are enquiring about the illegal changes made on the NSEL platform.  NSEL alleged in their charge sheet that the brokers were involved in miss selling products of NSEL by deceiving their clients on the NSEL platform were found to be different from those on brokers’ records

Two years ago, three executives of leading brokerage firms Anand Rathi Financial Services, Geofin Comtrade and India Infoline were arrested by the economic offences wing of Mumbai police, and were later released on bail.

The ED registered a criminal case under the PMLA Act in 2013, to probe the case. So far, it has made an attachment of Rs 800 crore in the case. A supplementary charge sheet could be expected

The NSEL crisis had led to a payment default of Rs 5,600 crore in July 2013, involving 23 Defaulters.

ED Rejects Motilal Oswal Plea

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 move came after enforcement sleuths asked him to appear before it on August 8. “There is no exemption granted for the individual,” an ED official told Business Standard.  “We are examining the broker’s role in the entire scam and need to cross-verify the evidences,” he added. When contacted, a Motilal Oswal Fin services spokesperson said: “Since it’s a regulatory matter, we can’t comment on the same.”

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. “We are looking at certain clues on unauthorised changes made on the NSEL servers. The names of clients on the NSEL servers were found to be different from those on brokers’ records,” said the official cited above.

Two year ago, three executives of leading brokerage firms Anand Rathi Financial Services, Geojit Comtrade and India Infoline were arrested by the Economic Offences Wing of the Mumbai police, and were later released on bail.

“The ED registered a criminal case under the Prevention of Money Laundering Act in 2013 to probe the case. So far, it has made an attachment of Rs 800 crore in the case. A supplementary charge-sheet could be expected,” added the ED official.