NSEL case: ED attaches 63 Moons (FTIL) properties worth Rs 135 cr under PMLA

The Enforcement Directorate (ED) has attached bonds worth Rs 135 crores in possession of 63 Moons Technologies Ltd (earlier known as FTIL), in the National Spot Exchange Ltd (NSEL) case.

With this, the total attachment in the case, including those of others, has reached to Rs 2,191 crores.

Earlier, the agency had attached properties of 63 Moons Technologies in the form of bonds/securities and bank balances worth Rs 1,118 crore out of total proceeds of the crime of Rs 1,254 crores laundered by NSEL and FTIL.

Till now, the agency probe revealed that NSEL had laundered proceeds of crime to the extent of Rs 1,102.03 crore and Rs 236.05 crore, and these proceeds of crime have been placed channelled, layered and integrated by NSEL in the form of personal expenses, operating expenses and financial expenses.

In year 2013, the ED had registered money laundering case in the NSEL scam under the provisions of PMLA, 2002 on the basis of FIR registered by EOW.

The PMLA investigations revealed that NSEL was acting as a platform for these defaulters and NSEL was earning in the process of charging various fees, charges and penalties like application processing fees, annual subscription fees, delivery fees warehouse receipt transfer charges, procurement commission, penalties on shortages penalty for trade cancellation, loading and unloading charges, penalty on ucc code, penalty on withheld demat units, recurring charges etc.

The gross income earned by NSEL from such paper transactions was Rs 1,112.03 crores from 2008-09.

The probe revealed that trades executed on NSEL's portal were rarely backed by the equivalent quantity of goods which was in the knowledge of the NSEL executives.

All circulars launched were discussed in the board meeting comprising key Management Personals of FTIL in the Board of NSEL and the board used to ratify and approve the same.

By virtue of its share holding of 99.99 per cent in NSEL, FTIL has complete authority over the all the affairs of NSEL enabling it to appoint all the Directors on the board of NSEL, through them effective control over the functioning of NSEL.

It was alleged that the accused persons in the said case hatched a criminal conspiracy to defraud the investors, induced them to trade on the platform of NSEL, created forged documents like bogus warehouse receipts, falsified the accounts and thereby committed criminal breach of trust against around 13000 investors to the tune of Rs 5600 crores.

Thus NSEL, its promoters, the senior management of NSEL and the 25 defaulters indulged in criminal conspiracy, cheating and collusion, wherein NSEL allowed trading on commodities by sellers, without ensuring goods of appropriate quantity and quality stored in the exchange controlled warehouses.

"It resulted in thousands of investors trading in non-existent goods and thereby genuine investors were defrauded of their investments by way of serious misappropriation", said the official.

The NSEL board comprising Key Management Personals of FTIL (as Shri Jignesh Shah, Shri Joseph Massey) had all the authority to frame the bye-laws, rules and regulations of the company.

Thus, FTIL was fully responsible for the functioning of NSEL and Board of NSEL, consisting key management personnel of FTIL, allowed to continue to trade in spite of repeated defaults deliberately towards non existence of the stock.