Two company chiefs quizzed by ED in Rs 5,600-crore NSEL scam
The ED had summoned Motilal Oswal to remain present for the questioning on August 8, but Oswal requested the agency to be represented by one of the directors of the company, which got rejected.
The Enforcement Directorate (ED), Mumbai has questioned Motilal Oswal, chairman and managing director (CMD) of Motilal Oswal Financial Services, for eight hours in connection with the National Spot Exchange Ltd (NSEL) money laundering case.
The ED had summoned Oswal to remain present for the questioning on August 8, but Oswal requested the agency to be represented by one of the directors of the company, which got rejected. Thus, with no options left, the CMD himself made his presence on Thursday, August 11, at Mumbai ED office early morning.
"Motilal Oswal arrived at 11 am, since then he was getting questioned and his statement was recorded in the case related to Rs 5,600 crore NSEL Scam," an official confirmed to IndiaToday.in.
"Me and our director Ajay Menon appeared and explained all relevant details about NSEL. Also we explained that our group has lost Rs 58 crore, as we were one of the biggest investors in NSEL. The officers were very cooperative and nice to us," Motilal Oswal told IndiaToday.in.
GEOFIN OFFICIALS ALSO SUMMONED
Besides Oswal, the managing director of Financial Technologies India Ltd (FTIL) Prashant Desai was also summoned and questioned during the day.
Source also confirm the presence of an official from Geofin Comtrade who was present but not quizzed due to the prolonged questioning of Oswal.
"The official of Geofin would be called again for the statement," said the source.
Last week, the ED had summoned nine brokers for questioning in connection with the NSEL scam. Out of these nine brokers, few names were: Motilal Oswal, India Infoline Commodities, Geofin Comtrade and Phillip Commodities.
"In our first round of questioning, we are trying to understand the role played by these brokers in this scam," an official said.
HAWALA TRANSACTIONS AND BENAMI TRADES
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 (EOW) of the Mumbai police, and were later released on bail.
The wing had found evidence of some irregularities on the part of the brokers in the National Spot Exchange Ltd (NSEL) scam. An interim report on the police's forensic audit had thrown up evidence of hawala transactions, benami trades and client code changes at some of the brokers. The interim report had also stated that some of the brokers were aware of the impending danger at NSEL.
The report also mentioned evidence of illegal and unauthorised changes at the back-end of NSEL servers, where brokers may not have any control. The names of clients on NSEL servers were found to be different from those in brokers' ones.
In his statement, former CEO of NSEL, Anjani Sinha had confirmed that the brokers associated with Jignesh Shah or FTIL were conducting bogus trading in overseas exchanges of FTIL through their overseas subsidiaries.
"All these charges are now getting probed by the ED officials (including the money trail of each broker), and therefore, all leading brokers involved in this scam are being summoned and questioned by the agency," the official said.
WHAT IS THE NSEL SCAM?
The NSEL crisis had led to a payment default of Rs 5,600 crore in July 2013, involving 23 borrowers. The ED had registered a criminal case under the Prevention of Money Laundering Act (PMLA) in 2013 to probe the case. So far, the agency has made an attachment of Rs 800 crore in the case, and very soon, by the end of this month, assets of FTIL.