Wednesday, December 18, 2013

Rajiv Gandhi wanted Bofors money to run Congress: Ex-CBI chief

NEW DELHI: Former Prime Minister Rajiv Gandhi wanted commission paid by defence suppliers to be used exclusively for the purpose of meeting expenses of running the Congress, a former CBI director has claimed in his autobiography.

"Such a step would largely prevent the collusive nexus between the middlemen, ministers, bureaucrats and that such a step could enable the government to do away with the quid pro quo relationship with some unscrupulous businessmen and equally unscrupulous politicians and bureaucrats," writes Dr A P Mukherjee who was the CBI director in 1989-90.

Mukherjee said Gandhi explained his position in a meeting on June 19, 1989, during a meeting between the two at the Prime Minister's residence. In 1987, Gandhi got embroiled in the Bofors scandal, in which people close to him were accused of taking kickbacks from the Swedish artillery gun manufacturer for an Indian Army contract signed in 1986.

Mukherjee says Gandhi came to know towards the end of 1984 that some "senior officers of the armed forces had been surreptitiously collecting huge amounts of money as 'commissions' in respect of most of the defence purchases, quite often in connivance with some ministers, middlemen and civilian officers as well".

When Gandhi discussed the problem with some of his advisors, "it was suggested by some that all commissions as payable or usually paid to middlemen should be banned but the commissions to be given as a matter of routine practice by the suppliers of major defence materials could be pooled under the care of some non-government entity which could be utilised solely for the purpose of meeting the inescapable expenses of the party."

Mukherjee said Gandhi was also in favour of "some legislation in line with the practices of some of the Western countries where contributions to party funds by business and industrial houses and individuals were allowed with provisions for their proper accounting, auditing and public discourse". However, the "wild, motivated and widespread" adverse publicity generated by Bofors scandal obscured the prospect of proceeding further on the matter, Mukherjee says in his book. The book, "Unknown Facets of Rajiv Gandhi, Jyoti Basu, Indrajit Gupta", hit the book stands in recent days.

While profuse in his praise for Gandhi, Mukherjee says he is now disclosing the contents of the conversation "with this remarkable human being whose trust I was privileged to receive in ample measure".

Mukherjee also discloses that the young PM told him about the need for substantial amount of money for running a party like the Congress. "The requirement assumes a huge proportion on the eve of assembly and/or parliamentary elections. This leads to massive fund collections by important party functionaries all over the country, which leads to an almost unbreakable unholy quid pro quo nexus between unscrupulous party functionaries, ministers and businessmen. I could sense this as the party's general secretary or even as its youth leader earlier," Gandhi reportedly told Mukherjee.
TNN | Nov 14, 2013, 02.35 AM IST

ZP’s e-Tender for works of digging borewells, small canals found “Fixed” to benefit firms

The e-Tender floated by Nagpur Zilla Parishad (ZP) for works of digging borewells, small canals and other related works has been found with many loopholes and “Fixed” to favour contractors and not the ZP. In simple words: The ZP has taken a contract to extend more and more benefits to contractors if the e-Tender is any indication.

The RTI activist Sanjay Agrawal, after receiving the copy of e-Tender under RTI, studied the tender in details and found the rates of Fixed Tender much higher than the similar works being carried out by some contractors in Zilla Parishad itself at lower rates.

Agrawal found Aman Drillers, Sunny Rock Drillers, Abhay Borewell, Ashish Borewell, M Ramraj, Shivshankar Drillers, Shree Shonkar Drillers, Shonkar Borewell, Radhyeshyam Borewell, Chandu Borewell, Shri Sai Borewell,  Nitesh Enterprises, Yogesh Enterprises, Renuka Borewell and other contractors carrying out the works of digging borewells and small canals at much lower rates than the Fixed Tender. Agrawal has sent a letter to the Chief Executive Officer of Nagpur Zilla Parishad in order to draw his attention towards the loopholes and favours shown to some contractors in the e-Tender.

The RTI activist Agrawal further said, the rates decided in the e-Tender Rate Card “B” are higher than the market rates. Following tables show the difference of rates between the e-Tender and market:

According to the Clause 5 of the e-Tender, the contractors, who do not agree with the rates, have been asked to write “Rate not quoted” which is totally illegal because the tender has been floated with Fixed Rate. It clearly means, the contractors, who do not agree with the rate and see the rate very low, have no authority to fill up tender.

Agrawal pointed out that the ZP is offering higher rates to even those contractors who are ready to carry out the works at lower rates in 20-25 per cent proportion. The process of negotiation after receiving the tender by the concerned ZP department is not transparent and raises doubts of “money deals.” The rates of the NMC and NIT, which the RTI activist has collected, have been found much lower than the ZP rates.

Sanjay Agrawal has urged the Chief Executive Officer of ZP to cancel the Fixed Rate e-Tender and float open tender. The open tender will create a competition among the contractors and will also benefit the Zilla Parishad by way of saving the revenue, Agrawal said.
Published On: Wed, Dec 4th, 2013
News Today | By Nagpur Today

AAP gets powerful boost as whistleblower of Rs 70,000 cr irrigation scam joins party

The honest bureaucrat and expert on irrigation, Vijay Pandhare had exposed exactly how the scam was perpetrated.

Nagpur News: The Aam Aadmi Party (AAP) in Maharashtra received a powerful boost and a shot in the arm when the Irrigation Officer and whistleblower of the 70,000 crore Irrigation Scam in Maharashtra Vijay Pandhare joined the party today in Nashik. He addressed a joint press conference with AAP leaders Anjali Damania and Sanjiv Sane to announce this decision at 1 pm on December 1 at Hotel Samrat in Nashik.

The AAP Maharashtra Convener Anjali Damania had blown the lid off the irrigation scam in which thousands of crores were spent on meaningless projects just to benefit crony capitalism. Government attempts to sweep the scam under the carpet were blown away when the honest and expert on irrigation, Vijay Pandhare exposed exactly how the scam was perpetrated. A bureaucrat himself, he was undeterred by the thought of repercussions from his political bosses and set a sterling example before the nation.
Saturday was his last day in service and today he has decided to enter the cesspool of politics to clean the muck that has ruined the country. Under his leadership AAP will pursue the perpetrators of the irrigation scam and strive to get every rupee back.

“We also welcome all bureaucrats who have tried their best to serve the nation despite the stranglehold of corrupt politicians, to take this fight to the public – to join AAP, contest elections and bring about the political revolution that is so critical to change the system,” the party Convener Anjali Damania said.
Published On: Mon, Dec 2nd, 2013
News Today | By Nagpur Today

MLA Sunil Kedar found guilty in NDCCB scam, ordered to deposit Rs 300 crore in the Bank

The scam pertains to purchase-sale of Government Bonds. The Cooperation Department has found Sunil Kedar, the former Chairman of the NDCCB, guilty in the scam after 11 years of gruelling and sustained probe into the massive irregularities.

Nagpur News: The Congress MLA from Saoner Sunil Kedar, the key accused in the Rs 150 crore scam pertaining to purchase-sale of Government Bonds, has been ordered to pay Rs 300 crore for causing loss to Nagpur District Central Co-operative Bank (NDCCB).

The Cooperation Department has found Sunil Kedar, the former Chairman of the NDCCB, guilty in the scam after 11 years of gruelling and sustained probe into the massive irregularities. Kedar has been ordered to deposit Rs 129.31 crore with 12 per cent interest per month the total of which stands at Rs 300 crore including the principal amount and the interest.

The scam got exposed in 2002. The Cooperation Department has also blamed the General Manager Ashok Chaudhary and other Directors of NDCCB for the scam. The Investigating Officer, in his probe report, has recommended legal actions against the guilty if they fail to deposit the amounts.

The Special Auditor (Class 1) Yashwant Bagde gave his final order on Thursday (November 28) after 11 years of investigation into the scam. According to the order, Rs 25 crore would be recovered from the General Manager Ashok Chaudhary. Moreover, the former Vice-Chairman of the Bank Asha Mahajan, former Directors Shyamrao Dhawad, Kusum Kimmatkar, Morebaji Nimje, Rameshkumar Nimje, and Santosh Chore have been ordered to pay Rs 1020 each as fines.

The Saoner MLA Sunil Kedar has been ordered to deposit 90 per cent of the scam amount in the Bank on account of recovery of loss. Sunil Kedar is also facing criminal proceedings in a court for the scam.


  • The MLA Sunil Kedar invested the NDCCB money in the Gilt through Mumbai’s Home Trade. 
  • Initially, after receiving the invested money back, the Bank invested the money for purchasing the Government Bonds but the money never came back. 
  • In the meanwhile, Sunil Kedar became Chairman of the NDCCB in 2000 and, in the first ever General Body meeting, he got the proposal regarding utilization of Bank money in the purchase-sale of Government Bonds passed in the meeting. 
  • This way, Kedar misused his powers and caused huge loss to the Bank.
Published On: Thu, Nov 28th, 2013
News Today | By Nagpur Today

Kedar trying to ditch order on Nagpur Co-op bank scam; demand to seize his assets raised

Even as the former state Congress president and senior party leader Ranjeet Deshmukh wrote a letter to the Chief Minister Prithviraj Chavan, alleging leniency in taking action against Congress MLA Sunil Kedar to recover Rs 299 crore allegedly bungled in Nagpur District Central Cooperative Bank scam, Kedar has been reportedly cooking up tricks to defy the recent order issued by the department of cooperatives. The department of cooperatives in its order has asked Kedar to pay up the dues allegedly siphoned off during the tenure of Kedar as the chairman of the bank.

In his letter Deshmukh demanded immediate seizure of assets owned by Kedar in order to recover the dues. However Kedar has been applying tactics to buy time and calm down the fire, just to avoid making payment.

Sources sent out strong indications that the Congress MLA Kedar may cannily evolve strategy to ditch the dues. He most probably would secure a stay and thus defeat the intention of the order, the sources said.

Kedar is reported to have already moved an appeal before the office of the minister of cooperation.

The action against Kedar has been initiated under section 88 of the Maharashtra State Cooperative Act. This stipulates that the management has to be held responsible if there is a fraud or negligence in a cooperative bank. Sources keeping tabs on the affair assert if Kedar’s appeal is rejected by the cooperatives’ minister, the bank can move the High Court in the matter.

The bank’s chairman says he would soon hold a meeting and the recovery order would be a prominently discussed in the meeting.
Published On: Thu, Dec 12th, 2013
News Today | By Nagpur Today

Crores are being spent on facelift afresh every year during Winter Session hinting big scam?

The shoddy state of affairs of Public Works Department have again been exposed when it handed over a total of 60 major works for Winter Session to a single contractor even though the dust of plundering of staggering money on bungalows of ministers, and the subsequent scam, has not settled down, sources said.

The eminent social activist Mohan Karemore has requested the Chief Secretary to order a high-level probe into the distribution of works for Winter Session which point out massive irregularities and also raise the possibilities of a big scam in the offing. “The firm which has no authority or permission to carry out works with the help of Hot Mix Plant has been given the contract for tarring of roads,” Karemore alleged in his complaint to the Chief Secretary.

Karemore further elaborated that every year, during the Winter Session of Maharashtra Legislature, the Chief Minister’s official residential bungalow, Deputy Chief Minister’s official residential bungalow, ministers’ bungalows in Ravi Bhavan premises, Nag Bhavan and MLA House buildings are being given facelift with colourful whitewashing, new furnitures, new lightings, new crockeries, tiles, and other material is either replaced or repaired.

The social activist Mohan Karemore has asked a million dollar question: “How these costly material get damaged to be replaced by new ones every year during the Winter Session”? “Why the same material is purchased and replaced spending crores and crores of rupees every year”? “Where the old but very costly material go”? This aspect is certainly an aspect of research for an expert, Karemore stated.

It may be recalled, a scam was got exposed in the purchase of costly material two years ago. The court had ordered sacking of many officials. PWD was forced to blacklist many contractors. Still the PWD refuses to take serious note of the affairs. Moreover, in the name of urgent works, no tenders are invited. “Do the works and take the money” is the policy of PWD. And that too without checking the works done by the contractors. How much work has been done is not recorded. “This year, a single contractor has been given the contract to carry out 60 major works without any tender process. The lack of transparency has given birth to colossal irregularities in the works. Many works are carried out only on papers and the money in mammoth proportion is being pocketed by the contractors and the concerned authorities,” Karemore alleged.

Vidhan Bhavan gardens blossoming, other power centres being given dazzling facelift

Nagpur News: Notwithstanding the political heat, uproar, war of words, hurling of grave charges, countercharges, cornering of Government over crucial issues of public interest in both the Houses of Maharashtra Legislature during the Winter Session in the Second Capital, the gardens in the Vidhan Bhavan premises are blossoming with beautiful, attractive, and dazzlingly colourful flowers of different varieties. Roses of all hues and colours are the main attraction. A look at the gardens makes one goes in trance.

Similarly, the Vidhan Bhavan, Chief Minister’s Secretariat, Ravi Bhavan and Nag Bhavan, the residential quarters of Cabinet Ministers and Ministers of State respectively, Ramgiri, the Chief Minister’s official residence, Deogiri, the Deputy Chief Minister’s official residence, MLAs’ House buildings are being given a facelift afresh with colourful whitewashing, new and attractive furnishings, and other decorations. The works of beautification is being carried under the supervision of Public Works Department.

  • However, the most important aspect of the Winter Session, the security, is being taken utmost care. 
  • This year, the Legislature Secretariat has decided to photograph every person for entry in the Vidhan Bhavan and its premises. 
  • The mediapersons, photographers, and others, who are interested in covering the proceedings of both the Houses, first have to visit Vidhan Bhavan to be photographed by a team which has arrived from Mumbai for the specific purpose. 
  • The photo session is likely to start within 3-4 days. 
  • The officials of Secretariat have also arrived and the Ground Floor has been fixed for photo session of mediapersons, photographers and others covering the proceedings of both the Houses of Maharashtra Legislature. 
  • All the interested have to complete the necessary formalities for entry in the Vidhan Bhavan without which entry is strictly prohibited.
Published On: Sun, Nov 17th, 2013
Featured News / News Today | By Nagpur Today

Even the dead not at peace in NMC-managed Ghats as wet wood is supplied for last rites

“The dead are not at peace with the NMC’s shabby state of affairs.” This is how the BJP Corporator Balya alias Narendra Borkar described while exposing the “Wood Scam” being run at the NMC’s crematoriums in Nagpur.

“The relatives of dead are being provided wet and inferior quality of wood for the last rites at most of the NMC-run crematoriums. The contractors fill up the tenders with very high rates, just to bag contracts at the crematoriums. Once the contracts are bagged, the contractors “recover loss” of high rate tenders by providing wet, inferior wood to relatives of the dead and thus leaving them to struggle hard to lit the pyre,” the BJP Corporator charged.

The Corporator questioned the role of Health Department authorities as they are supposed to monitor the affairs at the crematoriums after the tenders are opened and contractors given the responsibility to provide wood and other material to relatives of the dead. NMC gives wood and other material free of cost to relatives for the last rites at NMC-run crematoriums. The Deputy Director of Health in NMC was issued a show cause notice in one of such instances, Borkar said.

“The NMC provides wood and other material free of cost. And for this, it invites tenders for purchasing wood from contractors. According to the terms and conditions of the tenders, the contractor has to supply high-quality wood like  Dhawda, Garadi, Saja etc. But the contractor supplied wet and inferior wood Babhul, Subabhul, Orange, Adjat, Neem, and other inferior varieties. I had gone to Gangabai Crematorium recently to attend the last funeral of a close relative. The pyre took four hours to get lit, almost two tins of Dalda was used and dozens of litres of kerosene  was poured on the pyre which finally was got lit. The wood supplied at the crematorium was checked with the help of local timber merchants and was found wet and inferior. Most disturbingly, not a single variety of wood mentioned in the tenders was supplied by the contractor. The NMC Commissioner Shyam Wardhane, Forest Department Officer Nandanwar and myself jointly inspected Gangabai Ghat. During inspection, not a single piece of mentioned wood was found. The rate of Rs 300-4000 was mentioned in the tenders but the wood at the crematorium was of Rs 1500-2000 rate thus adequately pointing out a scam in supplying wood to NMC-run crematoriums,” the BJP Corporator Balya Borkar asserted.

The NMC has given contract for supplying wood to Mahesh Agency, and according to Balya Borkar, the agency is owned by Corporator Parinay Fukey. 

The contract should immediately be cancelled as the wood is not being supplied in accordance with the terms and conditions of the tenders, the BJP Corporator has demanded.
Published On: Thu, Nov 7th, 2013
News Today | By Nagpur Today

Gadkari’s co took loan of Rs 39.50 cr on sugar mill land bought at Rs 14.10 cr

In the light of recent allegation by social activist Medha Patkar about the sale of sick sugar mills in Maharashtra to politicians at throwaway prices, a major sell out at dirt cheap prices cropped up in Bhandara district. The sick sugar mill Wainganga Sahkari Sakhar Karkhana along with government leased 66.53 hectares of land which was mortgaged to Maharashtra State Co-operative Bank (MSCB) was sold for a consideration of just Rs 14.10 crores whereas the current value of the land stands at somewhere around Rs 300 crores.

The said sugar mill and the land is located at mouza Narsinghtola in Mohadi tehsil of Bhandara district.  And the sale was done in favour of none other than Wainganga Sugar and Power Limited, a part of Purti Group owned by former BJP leader Nitin Gadkari. It is learnt that the said land along with movable and immovable properties is now mortgaged with Bank of India’s corporate branch in Nagpur for Rs 39.50 crores.

Talking to Nagpur Today on phone, Medha Patkar said that it is a matter of detailed inquiry to find out how the privatization of cooperative sector has happened. “Suprisingly, Gadkari’s Purti Group bought two separate sugar mills and land at similar price of Rs 14.10 crore. Similar pattern of fraud was followed in this deal as was done in case of Chhagan Bhujbal’s buying a sick unit in Malegaon, Ajit Pawar in Aurangabad and Amit Deshmukh who bought Priyadarshini mill,” she added.

Patkar said that it should be investigated properly how such loss making mills were permitted and whopping loans accumulated on it later on. “Why bank provided such heavy loan amount to these units. It seems it was a ploy to first seize the sick unit and then committing fraud in selling those out at dirt cheap rates. Even no proper bidding was done in the process. The dues of Rs 800 crores of the workers from 40 such factories are still not paid. Even the permission of farmers was not taken before moving ahead with the deal. This is clear violation of Cooperative Act,” she said.

However much murkier was the picture even before the said sugar mill and the land in Bhandara came into the hands of Purti Group. Bhandara district administration which originally owned this 66.53 hectares of land had leased it out to the erstwhile Wainganga Sahkari Sakhar Karkhana on December 22, 1986, which further mortgaged it to Maharashtra State Co-operative Bank for want of loan. When the loan payment was defaulted the bank put up the land for sale.

Later, the land was cannily sold under the much low profile deal with Vidarbha Realties Private Limited, the rechristened Wainganga Sugar and Power Limited which became a part of Purti group. The deal was sealed on March 8, 2010, when the value of land was not less than Rs 100 crore but it was sold at Rs 14.10 crores only. This was the deliberate ploy to ultimately bring the land to the ownership of Gadkari, a source added.

Liability of Rs 3 crore only!!
Bhandara district collector had earlier fixed the liability of Rs 3 crore as unearned income on Wainganga Sugar and Power Limited for overlooking revenue norms but later shifted the same to MSCB on the appeal by Wainganga to the Divisional Commissioner. However what went unnoticed, or deliberately kept under the wraps, was the petty price of Rs 14.10 crore given for such a whopping piece of land comprising sugar mill and additional 66.53 hectares of open land leased by the government.

Rajesh Pugalia, Nagpur district Secretary of Aam Aadmi Party said, “An independent inquiry should be conducted under Supreme Court. We do not believe in CBI inquiry as it is running at the hands of Congress which is backing Gadkari in Nagpur. It is not just the question of defaulting on liability of Rs 3 crore but it’s a scam which runs in hundreds of crore.

A detailed inquiry should be conducted to find out what amount of loan was pending on Wainganga Sahkari Sakhar Karkhana at the time of its auction. The timing of the deal should also be taken into consideration as there is some political interest linked to it, Pugalia claimed.

Patkar too demanded judicial probe into more such deals of sick sugar units. “The chief minister said that inquiry is on but it is being conducted by ministry. How can you expect ministry to conduct an impartial probe. We want judicial probe into the matter,” Patkar told Nagpur Today.
Published On: Sun, Dec 15th, 2013
Featured News / nagpur / News Today | By Nagpur Today

Maharashtra Legislators urged to raise Rs.2000 crore ‘Shreesurya–Wasankar- Satvik’ Scams

Nagpur News: After EOW has arrested directors of ‘Shreesurya Group’ under charges of cheating of 10 thousand investors from farm crisis hit Vidarbha and Marathwada lured with towering return dumped now recently another two wealth management companies one floated by Dr. Prashant Wasankar and another floated by Amol Dhake titled Satvik Financial Services Ltd. have been reported to be involved in same illegal acts and facing same fate, they have trapped more than 10,000 middle class and old aged pensioners by promising very high returns of schemes which were never allowed by RBI or SEBI nor these companies got any legal permission to do but they are till looting innocent investors as administration is protecting them hence Maharashtra legislators are being humbly requested take up this serious issue on the floor of house as winter session in progress in nagpur itself, Kishore Tiwari of Vidarbha Janandolan Samiti (VJAS) informed in press release today.

Nagpur has been rocking with such stories of Mega Investment Scam and it is alleged that these so called wealth management companies has sussefully eroded eroded the hard earn money of more than five thousands innocent people offering high dreams of rich future within short span of time as per documents attached with this complaint that Wasankar who is charging huge amount membership amounting more than Rs. One lakh per annum collected more than Rs. 2000 crore giving post dated cheques offering around 30% interest on deposit nut now forget the interest investors are finding difficult to get back their own money more over, this firms run Dr. Prashant Wasankar company and Amol Dhake titled Satvik Financial Services Ltd are not registered with any regulator under finance ministry or Reserve Bank of India or Securities and Exchange Board of India (SEBI) for collecting such deposits which is illegal as per GOI acts and Mah.state’s money leading act. But nobody has questioned the company as on today hence Maharashtra lawmakers are to ask Govt. to initiate the action under Maharashtra protection of investors deposit act 1999 (MPID) against Wasankar Group promoters in order to save these investors ,Kishore Tiwari demanded.

“The grid of investors or depositors to higher return is leading to innocent victimization in which most victims are middle class pensioners hence we are urging CM to have urgent intervention to get back basic capital of these dying old age pensioners as we have received lot complaints that Dr. Prashant Wasankar has denied to pay back capital sighting the reasons of financial crisis hence state should give him financial bailout package as all illegal activities of Wasankar and amol dhake are being promoted and protected by Babus, police and other hostile pillars of democracy” Tiwari added.

In letter open letter to all MLA/MLC it is requested that that Dr.Prashant Wasankar and Amol Dhake have been working in Nagpur as sub-broker of BSE-NSE capital market since last two decades ,have earned the confidence of investors to larger extend and has been writing in local newspapers on wealth creation solutions and arranged investors meet in all metros of India and abroad ,is having active operation in Australia and Singapore but his real activities of running fishy and illegal deposits schemes offering interest rates more than 1.5% has been reported in Feb,2013 and when shreesurya scan was reported , cracks to the trust of wasankar developed and investors panic of getting capital money back has exposed the bankruptcy of wasankar group and investors realized they have been dumped and cheated by fraudulent misleading investment advices given by Dr.Prashant Wasankar ,has approached VJAS to get back their hard earn life time earning hence CM Maharashtra has been urged to intervene in the matter as local politicians are covering misdeed of Wasankar ,Tiwari added.

VJAS has attached promissory notes and cheques given Dr. Prashant Wasankar and Interest chart signed by himself offering the schemes that double the money with 30 months and offering a membership collecting Rs lakhs of rupees then members where asked to give fix deposits and but now investors are demanding the return of the capital but Dr.Prashant Wasankar has failed to return the money and he has been asking the investors to wait sighting recession in share market and helpless investors are crying before the office of Wasankar Group and in the plea to CM of maharashtra VJAS has drawn the attention of administration that all deposits collected by the Wasankar company are illegal and has no legitimate status where as he has been fully protected by local Police Authorities, SEBI, RBI, Govt. of Maharashtra etc. and activities of Wasankar Wealth Management Group and Satvik Financial Services Ltd. is nothing but money laundering activities and it has international network too, Tiwari added.

Recently Wasankar Group and Satvik Financial Services Ltd. illegal activities and bankruptcy was reported in electronic and print media but administration and police have turned blind eye but now investors are gathering before the of Wasankar Group and Satvik Financial Services Ltd. offices and crying for money but they are finding helpless as administration has turned blind eye to this scam earlier too , last month Sameer Joshi has dumped innocent investors around Rs.240 crore earlier that one Pramod Agarwal has dumped thousands of investors to tune of Rs 100 crore on the name of Mahadev Land Developers and Ullas Khaire had dumped around 1 lakh people of Rs 1,100 crore and now this Wasankar Group and Satvik Financial Services Ltd.likely repeat the same story hence we are urging Mah. CM to initiate action under Maharashtra protection of investors deposit act 1999 (MPID) against Wasankar Group and Satvik Financial Services Ltd. Promoters so that innocent investors hard earn money is protected ,Kishore Tiwari added.
Published On: Wed, Dec 11th, 2013
News Today | By Nagpur Today

Satvik Financial Services defaults on payment; Dhake clarifies stand

As the dubious estate of ponzi schemes running with the lure of handing out high returns started to collapse, the investors have become wary of parking their funds into every other organization, especially those promising them high returns. After Shreesurya Scam and Wasankar Wealth Management defaulting hugely on payment, city’s another firm Satvik Financial Services Private Limited running its office from Bharat Nagar has come under the clouds for not paying to his customers as per the promise he made in his promissory note. The company has been operating its deposit schemes under its arm Satvik Investment.

“Forget the monthly interest, we are now running from pillar to post to get our principle amount and now he has even stopped responding to my calls,” lamented an investor who had parked Rs 5 lakh into his scheme on April 26, 2013. He was promised the monthly return of Rs 25,000 beginning 30 days after the execution of the promissory note. However, till date neither he received any interest nor his principle amount. The concerned investor has been going through the tough time following up the company’s Chairman Amol Dhake who reportedly floated the amount into other avenues. He also provided the post dated cheque (dated July 26, 2013) as the guarantee against the deposit. However the cheque has bounced twice for the lack of sufficient funds in the account.

“Dhake had been pestering for the investment through one of his mediators for a long time. I shelled out Rs 5 lakh for which I had to earn Rs 8 lakh as there is a 40% deduction on the earnings in the country i work. When I came to Nagpur I was given the promissory note and the guarantee cheque. He had promised the amount of Rs 25,000 till the maturity of the amount. However till this date, I have not received a single rupee from his side. He has even stopped responding to my calls now, nor he is giving any word as to when he would return my money.”

One of these investors had even sent him the lawyer’s notice but he did not receive the notice.

Another investor has invested Rs 2 lakh and facing the similar trouble. Then there is a builder who had invested more than one crore rupees.

Dhake in his promissory note, a copy of which is in possession of Nagpur Today, has stated that he has taken the money as unsecured loan and is not abided by SEBI, RBI, NBFC and any other government bodies’ rules and regulations.

When Nagpur Today contacted Amol Dhake, he said, “There has been a trend in Nagpur to give money on the basis of trust. I do not have many such investors who have handed out the money to me for investing on this basis. There were some revenue restrictions due to the dollar pressure due to which there is some delay but I will pay all of them in the next 2-3 months.”

When told that he was not responding to any of the investors’ call, he denied doing so adding that the investors could have come to me if there was any problem. “I am very much accessible,” he said. Upon the payment default, he said, “The avenue in which I have invested the money for the concerned investor might have reported loss due to which I could not pay money on time but it is not that I will not pay. I will certainly pay them back.”

When asked if he was authorized to collect such a huge deposit without any authorization from SEBI or RBI, he clarified that the mode of investment which he had invited does not fall under the norms of both the governing bodies as it was done purely on trust.

Meanwhile, the investors were not willing to buy Dhake’s theory and hit the panic button. “Similar assurances have been given in the past too but no substantial results have come across. Now we are considering approaching Economic Offences Wing for help,” said one of the investors.
Published On: Wed, Dec 11th, 2013
Featured News / News Today | By Nagpur Today

Tuesday, December 17, 2013

Multi-level marketing firm collected 425cr

Mumbai: The city economic offences wing (EOW) said multilevel marketing firm QNet had collected over Rs 425 crore from its investors. QNet is accused of using the banned binary-pyramid business model for their multi-level marketing scheme to entice investors. The bank accounts of the firm, its independent representatives and associates have been frozen. There is reportedly a total of Rs 110 crore in these accounts.

An EOW source said the company continued its schemes in the name of Quest Net by floating a firm, Vanmala Hotel Travel and Tourism Services Pvt Ltd, even after cases were registered against it in Chennai, Andhra Pradesh, Maharashtra and Karnataka.

“In April 2012, QNet Ltd formed Trans View Enterprises and Vihaan Direct Selling Pvt Ltd and continued their schemes. Through its website,, the firm gathered its employees who had worked for it a decade ago. From April last year to August this year, the firm collected over Rs 425 crore from 90,000 people,” said an officer. “We are speeding up the investigation and more arrests are likely soon,” said Rajvardhan Sinha, additional commissioner, EOW.

The company lured investors with various schemes with an investment between Rs 30,000 and Rs seven lakh. “The firm posed as a marketing firm which would sell bio-disc, watches, chiPendants, gold coins, herbal products, E-education packages, holiday packages etc. They even claimed that by using the bio disc one can cure cancer and brain related diseases,” said an officer.

“Some money has been transferred to Malayasia, Singapore and Hong Kong too. The exact figure is not known. We are probing the money trail.” So far nine persons, including two women, have been held for cheating, forgery and under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
Mateen Hafeez TNN

Orange City Hospital illegally built on reserved land, 7/12 record shows it’s still not sold!!!

Equaling the quantum of scam to the likes of Adarsh Society Housing scam in Mumbai, another scam much sensitive than this has come to light in Nagpur. In a startling revelation, it surfaced that city’s renowned Orange City Hospital and Research Institute located on Khamla square has been illegally built on the piece of land still owned by the government. A 7/12 record of the said land, a copy of which is with Nagpur Today clearly showed there was no sale or purchase of this land to any party, individual or commercial, and that this piece of land is still owned by the government.

Surprisingly, the matter had been brought to the knowledge of state ministry which reportedly ordered the demolition of Orange City Hospital building back in 2007, but the action is yet to be initiated. At that time action was also taken against a surveyor named Bhujade and a concerned officer as the goof up surfaced. Since then, the matter is still pending with state ministry.

Sources revealed that the concerned file has been sent to the divisional commissioner’s office to seek action in this regard. The date for arriving at the solution was even fixed as December 7, 2013. However no update has yet come from the divisional commissioner.

The land in question is on khasra no. 35 of NIT sanctioned plan, out of which 25 plots were sanctioned long back during the British regime. The British Commissioner of Raipur (Nagpur then comes under CP and Berar state), while sanctioning these plots in the year 1943 had also issued a letter that plot no 1, 2 and 3 were not to be auctioned for 3 years. Later there was no change made in the order and it remained static because these plots are situated in low lying area, sources informed. Currently the Orange City Hospital building stands on plot no. 1 and 2, which were not meant to be used for any erection.

The same plot 1 and 2 were registered in the name of one Yadav in the city survey office no.3. Later, these plots were purchased by the Orange City Hospital which somehow managed to get his name in city survey sheet allegedly in connivance with the officials. This was done in clear violation of the previously sanctioned plan.

Later when the goof up came to light, an inquiry was initiated into the matter, following which the name of Orange City Hospital was removed from the city survey office no. 3 and subsequent action was taken on the surveyor named Bhujade and an officer concerned.

Who sold plot to Orange City Hospital?
A copy of 7/12 of the land drawn on December 10, 2013 clearly shows the land still belongs to the government and that no sale or purchase was officially done. This raises suspicion over who sold the plot to Orange City Hospital when the record says it is still not sold to anyone.

NMC Commissioner Shyam Wardhane, when inquired in this regard, states that since the land belongs to the government it is the matter pertaining to the collector and not the NMC. “Civic body only looks after providing amenities whereas the allotment of land is done by the collector. This part falls under his jurisdiction,” Wardhane said.

Despite many efforts made to contact District Collector Saurabh Rao to have his say in this regard, he remained unreachable.
::: Ravikant Kamble ( mail to : )
Published On: Tue, Dec 17th, 2013
Featured News / News Today | By Nagpur Today

NSEL scam: Lotus Refineries chief sent in police custody

MUMBAI: An arrested borrower of the NSEL was today remanded in police custody for four days by a local court which accepted Mumbai Police's plea to interrogate him to unearth "the larger conspiracy" behind the scam at the crippled spot exchange.

Arun Sharma, Chairman of Lotus Refineries who is also a film financier, was arrested by Economic Offences Wing (EOW) yesterday, becoming the fifth person to land behind bars in the payment crisis at National Spot Exchange Ltd (NSEL).

"Sharma was produced before a Court which remanded him in police custody till November 16 for further investigation," said Additional Police Commissioner (EOW) Rajvardhan Sinha.

The EOW told the Court it needs to unearth "the larger conspiracy" behind the scam and for this purpose, Sharma's interrogation was required. Subsequently, Sharma, who produced just-released film `Satya 2', was sent in police custody.

EOW had earlier arrested four persons -- Anjani Sinha, former CEO of NSEL; Nilesh Patel, Managing Director of NK Proteins (a defaulting firm), and Amit Mukherjee and Jay Bahukhundi (both mid-level executives of the bourse) in connection with the Rs 5,600-crore payment default.

Sharma, who had borrowed Rs 159 crore from NSEL and did not make any payments, had splurged the money on real estate, decorating his office among others, police said, adding his outstanding dues now stood at Rs 252.56 crore.

According to police, Sharma's intention was very clear - to splurge the borrowed money on non-productive activities. "He spent about Rs 38 crore to buy an office in Worli (central Mumbai) and another Rs 1 crore on furniture. He invested a few crores of rupees in making `Satya 2'," said another officer.

Meanwhile, investigators are scrutinising accounts of Mohan India, one of the biggest NSEL borrowers, police said.

EOW is continuously sending property attachment notices under the Maharashtra Protection of Interest of Depositors Act to the accused named in the FIR, they said.

EOW has invoked the stringent Act in the case, which empowers them to attach immovable assets of the accused. Some of the largest borrowers of NSEL include Mohan India, NK Proteins, Laxmi Group, MSR Food Processing and Swastik Group.

An FIR was registered on September 30 by EOW against top NSEL executives (including promoter Jignesh Shah). They have been charged with cheating, forgery, breach of trust and criminal conspiracy, among others.
PTI Nov 12, 2013, 11.06PM IST

FIR may stay even if NSEL scam accused, investors strike a deal

MUMBAI: A settlement between the promoter of or defaulting borrowers on NSEL, on the one hand, and aggrieved investors, on the other, may not lead to charges being withdrawn against the accused.

Any financial settlement does not guarantee the quashing of the first information report (FIR) filed by the Mumbai police against these parties, said a top Mumbai police official investigating the 5,500-crore scam.

"Only the High Court or Supreme Court can quash an FIR, and either can make such a decision after seeking our opinion," said Rajvardhan, additional commissioner of police, Economic Offences Wing (EOW), Mumbai police. "Any deal between FT or the defaulting borrowers and NSEL investors does not mean the FIR will be quashed ... I think you should be very clear in your minds about this point," he told mediapersons a day after NSEL Investors Forum said the fate of a likely settlement with promoter FT could be known by this weekend or early next week.

A broker who plays a key role in the forum said the withdrawal of FT's name from the FIR would be a given in any possible agreement between investors and the company. "Normally, we have seen FIRs being quashed by courts in cases between two persons fighting among themselves and they reach a settlement ... not in cases where large public interest is involved. In this case, there are 13,000 investors on one side and two PSUs. What about them?" he asked referring to MMTC and PEC.

"It should not be taken for granted that in case a settlement is reached the FIR is quashed. A simple analogy is if a robber returns all the goods after being caught the criminality cannot be wished away. So, the FIR, in this case, is only the process of setting in motion criminal law. It is not an end in itself...and we are guided only by law and larger public interest," explained Rajvardhan.

In a continuation of the investigation, the CFO of Adani Wilmar appeared before the Mumbai police which will look into the books of the equal joint venture between Adani Wilmar and NK Proteins, said Rajvardhan.

Part of the 960-odd crore that NK allegedly owes investors was pumped into this JV which has shown large losses, according to investors, despite being created recently. Another borrower, PD Agro, returned 11 crore to NSEL for repayment to the investors and the Bombay HC rejected an appeal of investors for extension of remand of Arun Kumar Sharma of Lotus Refineries, saying that borrowers had no right to appeal for remand of an accused, added Rajvardhan.
ET Bureau Nov 23, 2013, 08.04PM IST

Mumbai Police SIT to conduct preliminary probe against NSEL

MUMBAI: Mumbai police has formed a Special Investigation Team (SIT) to conduct a preliminary inquiry into Rs 5,600 crore National Spot Exchange Limited (NSEL) payment default crisis after some investors lodged a complaint against the exchange and its office bearers.

"A special team, headed by deputy commissioner of police, has been formed to look into complaints against the NSEL," Joint Police Commissioner Himanshu Roy told PTI today but refused to divulge details regarding the progress of preliminary inquiry.

NSEL, promoted by Jignesh Shah-led Financial Technologies (India) Ltd, is facing the problem of settling Rs 5,600 crore dues of 148 members/brokers, representing thousands of investor-clients, after it suspended trade on July 31 on the government's direction.

Shah is also likely to be summoned by investigators soon, said another police officer.

The SIT is being headed by a DCP and comprises an assistant police commissioner and five police inspectors.

Meanwhile, NSEL has garnered only Rs 10.32 crore so far against Rs 174.72 crore payable to investors tomorrow, raising the possibility of third straight default.

The bourse had defaulted in last two pay-outs as it could garner only Rs 92.73 crore in the first pay-out and Rs 12.05 crore in the second pay-out out of the scheduled Rs 174.72 crore each.

Former BJP MP and president of Investors' Grievances Forum, Kirit Somaiya recently filed a PIL in the Bombay High Court stating that NSEL 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 also alleged that government officials and politicians connived with NSEL to cheat investors.

There are 24 buyers/members which have to pay Rs 5,600 crore to the spot exchange for settling dues of the investors.
PTI Sep 2, 2013, 10.25PM IST

NSEL crisis: Police promise speedy liquidation of attached assets

A day after Mumbai police attached the properties of National Spot Exchange Ltd's director Jignesh Shah, about 50 investors of the spot exchange met the Mumbai Crime Branch chief. Reuters A day after Mumbai police attached the properties of National Spot Exchange Ltd's director Jignesh Shah, about 50 investors of the spot exchange met the Mumbai Crime Branch chief. Reuters

A day after Mumbai police attached the properties of National Spot Exchange Ltd's director Jignesh Shah, about 50 investors of the spot exchange met the Mumbai Crime Branch chief today, who assured that attached assets would be liquidated at the earliest and proceedings will be distributed on pro-rata basis.

The investors demanded stern action against board of directors and sought immediate arrest of former MD of spot commodity bourse MCX Shreekant Javalgekar, claiming that he was aware of all the happenings along with Shah.

Joint Police Commissioner (Crime Branch) Himanshu Roy said, "As per the law we will do everything to liquidate attached assets at the earliest and consider the option of distributing money on a pro-rata basis (to investors)."

Indicating that more arrests would take place in the case soon, Roy, who is supervising the probe, said, "We are making a watertight case."

Some of the investors told police that they had pressing need of money, Roy said, adding that, "We are doing our best within the legal purview to ensure that investors receive their money back soon."

Police yesterday attached properties of directors Shah, Joseph Massey -- also a Director at the now defunct spot Exchange, NSEL non-Executive Chairman Shankarlal Guru, and former MD of MCX Shreekant Javalgekar.

So far, police have attached 206 properties (of the accused and the defaulters), valued at total of Rs 2,985.90 crore.

The Economic Offences Wing of police has invoked Maharashtra Protection of Interest of Depositors Act, which empowers police to attach immovable assets of the accused.

An FIR lodged in September against Shah, Massey and others charges them with cheating, forgery, breach of trust and criminal conspiracy, among other offences.

The spot commodity bourse, promoted by Shah-led Financial Technologies (FTIL), has been facing problems in settling Rs 5,600 crore dues of 148 member brokers, representing 13,000 investor clients.
PTI | Mumbai | Updated: Dec 04 2013, 21:42 IST

NSEL scam: Police starts attachment of borrowers' properties

The Mumbai Police, probing the Rs 5,600-crore (Rs 56 billion) scam at the National Spot Exchange has  initiated the process of attaching about 25 immovable assets of the borrowers and has shortlisted nearly 100 properties of all the accused in the case, a senior police official said.

Around twenty-five immovable assets of borrowing companies spread across the country will be attached in the first phase, said an officer at the Economic Offence Wing of Mumbai Police.

The officer said the value of the 100 shortlisted properties was sufficient to recover Rs 5,600 crore, which the crippled exchange promoted by the Financial Technologies group of Jignesh Shah, owes to over 13,000 investors and 148 members/brokers.

The EOW has invoked the `Maharashtra Protection of Interest of Depositors Act' in the case, which empowers them to attach immovable assets of the accused.

The investigators will later start the process of attaching the properties of promoters, directors and others. The probe so far has also suggested that money has been routed outside the country by some companies and this is a clear case of money laundering, the officer said.

Some of the largest borrowers of NSEL include Mohan India, NK Proteins, Laxmi Group, MSR Food Processing and Swastik Group.

An FIR was registered in the case on September 30 by the EOW against top NSEL executives (including Jignesh Shah and Joseph Massey). They have been charged with cheating, forgery, breach of trust and criminal conspiracy, etc.

The police have arrested four persons so far – Anjani Sinha, former CEO of NSEL; Nilesh Patel, managing director of NK Proteins; Amit Mukherjee, a former AVP of the exchange and Jay Bahukhundi, another ex-AVP of NSEL.
November 08, 2013 09:03 IST

Mumbai Police prepared to securely warehouse every accused in NSEL Scam.

Mumbai Police prepared to securely warehouse every accused in NSEL Scam. Claim to have and ready to borrow Bulk Handling Capacities if required.

Warehouses, Commodity Trades, Bulk handling, Exchange, Borrowers and Defaulters have become the latest buzzwords doing rounds among the sleuths in EOW of Mumbai Police. In-between the serious investigations, the same words are often used to crack jokes to lighten the tense atmosphere owing to public pressure.

One such joke is the “Bulk Handling” requirements that the agency may require to “securely warehouse” a long list of accused who are on their radar. The EOW claims that their warehouse has enough capacity and they can borrow some space or even rent out some to store the accused that are in the queue for being arrested.

The Cells are there to stack the accused, though fans and beds may be “non-existent” like the commodities in NSEL warehouses. Though 3 table fans can be “exchanged” on a daily or even an hourly basis between accused, under strict supervision of a constable.

For now a bigger and better room in the same premises where Anjani, Amit and Jai are housed as Guests is being done up in anticipation of arrival of a new guest next week. “Atithi Devo Bhava”, a constable laughed. Another one pitched in to say, “Chief Atithi, Tum kab aaoge”, indicating that a bigger name than Anjani Sinha is expected soon.

An Inspector interrupted them to say, “Whatever is outlined as per the manual, we will provide to the NSEL Scam accused till they are in Police Custody”. A Vegetarian joint in Crawford market is understood to be the favorite “Warehouse Delivery” eatery for Jai, while Amit is preferring a nearby Bengali Joint named after a famous Railway Station in Kolkata. Anjani may like to get his “LunchBox” from home through a Dabbawala, a constable said.

NSEL payment crisis: EOW freezes 58 bank accounts; exchange defaults 7th time

The economic offences wing (EOW) of the Mumbai Police on Tuesday froze the bank accounts of the crippled NSEL even as the CBI started a probe into alleged duping of customers and irregularities by the commodity exchange.

The NSEL defaulted on its committed weekly payout for the seventh consecutive time on Tuesday after the accounts were frozen.

"Today, we have frozen 58 bank accounts, including the accounts of the NSEL and others involved in the crime," Additional Police Commissioner (EOW) Rajvardhan Sinha said.

The action comes a day after police registered an FIR in connection with the Rs 5,600-crore payment crisis at the National Spot Exchange Ltd (NSEL), promoted by Jignesh Shah-led Financial Technologies (FT).

Sinha said the agency completed raids on as many as 54 offices and premises of the exchange, its promoters and defaulters.

The Central Bureau of Investigation (CBI) said the EOW of its Mumbai branch had received complaints from investors who lost money with the NSEL.

"We have registered a preliminary enquiry to look into all aspects comprehensively," CBI spokesperson Kanchan Prasad said in New Delhi today.

The NSEL, which was scheduled to pay Rs 174.72 crore to investors today, confirmed the EOW action on its bank accounts and blamed the default on the freezing of an escrow account.

"We could not make the payout in view of the EOW freezing our bank accounts, including the escrow account," NSEL said in a statement.

"NSEL is unable to make any payouts today. We have informed FMC (the regulator) of this development. We are taking legal advice to de-freeze the settlement bank accounts and investors and members will be notified in due course," the statement added.
PTI     Mumbai   Last Updated: October 2, 2013  | 00:00 IST

Mumbai police attach assets worth Rs 5600 cr of 26 defaulters in NSEL case

Mumbai: Probing the Rs. 5,600-crore scam at National Spot Exchange Ltd (NSEL), Mumbai police have completed attachment of assets of all 26 defaulters in the case.

"We have attached a total of 212 properties worth Rs. 2679.4 crore of defaulters, directors and senior officials of the NSEL. We have completed the attachment of all the defaulters. So far 325 bank accounts have been frozen, which have a total bank balance of Rs 172.15 crore. We have also attached money in shares and investments worth Rs 252.6 crore of the accused named in the FIR," a senior official from the economic offences wing (EOW) of Mumbai police said on Sunday.

Busy examining the books of accounts of borrowers-turned-defaulters at present, the EOW's next focus would be studying brokers' books of accounts, the official said. Not the right trading. PTI Not the right trading. PTI An FIR in the case was lodged on September 30 by the EOW against directors Jignesh Shah, Joseph Massey and others charging them with cheating, forgery, breach of trust and criminal conspiracy, among other offences.

The spot commodity bourse, promoted by Jignesh Shah-led Financial Technologies India Ltd (FTIL), has been facing problems in settling dues worth Rs. 5,600 crore to 148 member brokers, representing 13,000 investor clients. Police suspect equal role of brokers in the scam as many of them have sold NSEL commodities despite having knowledge of the fraudulent practices in the spot exchange.

The EOW has invoked Maharashtra Protection of Interest of Depositors Act, which empowers police to attach immovable assets of the accused. The EOW has so far arrested five persons in the case - Anjani Sinha, Amit Mukherjee and Jay Bahukhundi of NSEL, and borrowers Nilesh Patel, managing director of N K Proteins, and Arun Sharma, chairman of Lotus Refineries and also a film financier. All of them are in judicial custody and lodged in Arthur Road Jail at present. PTI

Dec 8, 2013
Read more at:

Mumbai police arrest former NSEL head Anjani Sinha

In the third arrest in the Rs 5,600 crore NSEL payment crisis, former managing director and chief executive of the beleaguered bourse Anjani Sinha was today apprehended by Mumbai Police's Economic Offences Wing. Before his arrest, Sinha was interrogated by EOW for several hours, a day after he was questioned at length by the Enforcement Directorate (ED).

Sinha was arrested for his alleged role in the Rs 5,600 crore payment crisis at the National Spot Exchange Limited(NSEL) which has affected 13,000 investors across the country, police said.

The police had earlier arrested Amit Mukherjee, a former assistant vice-president of the exchange on October 9, while Jay Bahukhundi, another former assistant vice-president, was arrested the next day. The ED has registered a 'preliminary inquiry' under the Prevention of Money Laundering Act, suspecting large-scale money laundering in the privately-promoted spot exchange.

Sinha and his wife Shalini, who is the managing director of family-run firm SNP Designs, were questioned by both ED and EOW. Sinha, who filed an affidavit before a city court a few days ago, blamed the entire former senior management of NSEL, including himself for the crisis.

The affidavit said he suspected that some of the former senior management members might have entered into dealings with buying members for their personal benefit and demanded a judicial inquiry against them.

He admitted to submitting "wrong stock statement" to NSEL board and regulator Forward Market Commission, based on the report by the warehousing division. Taking the blame for not informing the board about increasing exposure and risk of widespread defaults, Sinha stated that the management allowed the exchange to function and did not stop trading due to fear of widespread defaults.

An FIR was registered in the case on September 30 by the EOW against Jignesh Shah, chairman and managing director of Financial Technologies which promoted the crippled exchange, Joseph Massey, MD of MCX-SX, the stock exchange promoted by the FT Group, and other promoters, directors and defaulters.

All of them have been charged with cheating, forgery, breach of trust and criminal conspiracy, among other offences, in connection with the payment crisis.

On October 1, the CBI too registered a preliminary inquiry in the case. NSEL has been facing problems in settling Rs 5,600 crore dues of 148 members/brokers, representing 13,000 investor-clients, after it suspended trade on July 31 on government's direction.
Thursday, Oct 17, 2013, 19:29 IST | Agency: PTI

EOW freezes NSEL bank accounts; no payout to investors today

The economic offences wing of the Mumbai Police today froze the bank accounts of the crippled NSEL even as the CBI started a probe into alleged duping of customers and irregularities by the commodity exchange.

The NSEL defaulted on its committed weekly payout for the seventh consecutive time today after the accounts were frozen.

“Today, we have frozen 58 bank accounts, including the accounts of the NSEL and others involved in the crime,” Additional Police Commissioner (EOW) Rajvardhan Sinha told the news agency this evening.

The action comes a day after police registered an FIR in connection with the `5,600-crore payment crisis at the National Spot Exchange Ltd (NSEL), promoted by Jignesh Shah-led Financial Technologies (FT).

Sinha said the agency completed raids on as many as 54 offices and premises of the exchange, its promoters and defaulters.

The Central Bureau of Investigation (CBI) said the EOW of its Mumbai branch had received complaints from investors who lost money with the NSEL.

“We have registered a preliminary enquiry to look into all aspects comprehensively,” CBI spokesperson Kanchan Prasad said in New Delhi today.

The NSEL, which was scheduled to pay `174.72 crore to investors today, confirmed the EOW action on its bank accounts and blamed the default on the freezing of an escrow account.

“We could not make the payout in view of the EOW freezing our bank accounts, including the escrow account,” NSEL said in a statement.

“NSEL is unable to make any payouts today. We have informed FMC (the regulator) of this development. We are taking legal advice to de-freeze the settlement bank accounts and investors and members will be notified in due course,” the statement added.

Police sources said they did not freeze the escrowaccount as it was opened for the specific purpose of making payouts to investors and brokers. The troubled exchange owes `5,600 crore to a number of brokers and 13,000 investors.

The escrow account was opened by NSEL after it was ordered by the Government to ensure payouts on priority to investors after the exchange halted trading two months ago.

The police officer evaded a direct reply when asked if the frozen bank accounts included those of Shah, Chairman and Managing Director of FT, and Joseph Massey, Managing Director and CEO of MCX Stock Exchange, which is promoted by FT, both named accused in the FIR.

“These were the bank accounts of the accused involved,” he said.The Ministry of Corporate Affairs has ordered inspection of accounts of NSEL and its promoter entity FT. A senior ministry official said it is checking if these entities violated any rules under the Companies Act.

Wednesday, 02 October 2013 | PNS | Mumbai

NSEL crisis: FTIL says FMC notice is premature

FTIL asks for cross-examination of the forensic report on NSEL in its response to the show-cause notice

Mumbai: Financial Technologies (India) Ltd, or FTIL, told the commodities market regulator on Tuesday that its show-cause notice is premature and questioned the credibility of a forensic audit report prepared by Grant Thornton on National Spot Exchange Ltd (NSEL), according to a person directly involved in the development, who declined to be named.

FTIL was responding to the 4 October notice issued by the Forward Markets Commission (FMC) asking its directors why they should be considered “fit and proper” to operate a commodities exchange.

FTIL is the owner of beleaguered NSEL, which is in the middle of a Rs.5,574.35 crore payment crisis to its investors. It also holds 26% in Multi Commodity Exchange of India Ltd (MCX).
FTIL’s promoter Jignesh Shah and directors Joseph Massey and Shreekant Javalgekar appeared for a hearing of the show-cause notice at the FMC office.

FTIL, in its response to the show-cause notice, has asked for cross-examination of the forensic report on NSEL. The firm also said it has “fully segregated management, control and operations in MCX which is a demutualized commodity exchange and the shareholding has no relevance to its management”.

Massey and Javalgekar not only held directorship on MCX and NSEL but were also senior executives on exchanges promoted by FTIL till recently.

On 25 September, Massey, who was to retire by rotation as a director in the company, withdrew his offer for reappointment, while on 19 October, Javalgekar resigned from the board, without specifying a reason.

Shah, founder-chairman, managing director and chief executive of FTIL, on 31 October resigned from the board of MCX, linking his decision to the crisis at the spot exchange.

FMC in its show-cause notice has alleged that even though borrowers had defaulted on earlier loans, they were allowed to raise money on the NSEL platform. FMC also said FTIL issued corporate guarantees for these borrowers for getting bank loans. The notice also said FTIL-promoted India Bullion Market Association was allowed to trade on NSEL and MCX.

In its response, FTIL said that the allegations related to NSEL have not been adjudicated but the final conclusions of the FMC notice showed the regulator prejudged the case against the parent firm. “NSEL appointed Grant Thornton in the first place to conduct the forensic audit,” said Ketan Shah, an aggrieved investor of NSEL. “Now they say their findings are questionable? It sounds ridiculous to me.”

Meanwhile, the economic offences wing (EOW) of the Mumbai police on Tuesday issued an order for attachment of properties of Mohan India Pvt. Ltd, one of the borrowers of NSEL, additional commissioner of police Rajvardhan Sinha said.

This order has been issued by EOW despite Mohan India’s recent pact with NSEL to pay Rs.771 crore over one year towards its settlement obligations. “I cannot comment on the agreement between Mohan India and NSEL, but we have issued an order for attachment of two properties of Mohan India,” Sinha said.

In a related development, a Maharashtra court on Tuesday extended police custody of Arun Kumar Sharma, director of Lotus Refineries Ltd, one of the borrowers of NSEL, till 16 November. EOW had arrested Sharma on Monday. The settlement crisis at NSEL came to light on 31 July when the exchange abruptly suspended trading in all but its e-series contracts. These, too, were suspended a week later. The closure of trading may have been prompted by an instruction from the ministry of consumer affairs to the exchange asking it not to offer futures contracts. A spot exchange isn’t supposed to do so, but NSEL was doing that.

NSEL tried to implement the change but because its appeal was to investors and members who were not interested in spot trades, it eventually had to suspend all trading. It later emerged that trading on NSEL happened in paired contracts, with investors, through brokers, buying a spot contract and selling a futures one for the commodity.

The entities selling on spot and buying futures were planters or processors and members of the exchange. It turned out there were only 24 of them, and they used the paired contracts as a way to raise easy money. When the trading was suspended, investors were left holding contracts that the members couldn’t buy because they didn’t have the money to do so.

Khushboo Narayan & Ami Shah Mail Me
First Published: Tue, Nov 12 2013. 09 42 PM IST

Lotus Refineries disputes NSEL claims, slaps notice

Lotus Refineries has slapped a legal notice on National Spot Exchange Ltd (NSEL) and urged the exchange to remove its name from the defaulters list.

The Mumbai-based company, which was responding to NSEL’s notice, had an exposure of Rs 265 crore in the exchange.

It owes Rs 253 crore after adjusting for the collateral it held with the exchange. It has also placed a fixed deposit of Rs 7.5 lakh as security with NSEL, and has said that it will pay the remaining Rs 5 crore when it is due.

Lotus had refined palm oil stock of 44,586 tonnes worth Rs 247 crore, according to an NSEL warehouse holding list issued on August 6.

Since the exchange has gone for a financial settlement of the entire trade, the company cannot sell the palm oil stock to recover the funds.

Speaking to Business Line, a spokesperson of the company said it had disputed the exchange claim of Rs 253 crore.

“We are in the process of reconciling our exposure in the exchange. If anything, we have to receive money from the exchange,” he said.

Terming the exchange move as illegal, baseless and mala fide, the Mumbai-based company said the unilateral declaration of NSEL proclaiming Lotus Refineries as a defaulter on August 22, in the face of pending commercial dispute, went against the principle of Rule 41 of the exchange. Lotus had sent its notice for conciliation to NSEL on August 19, it said.

Reputation loss
Calling upon the NSEL to immediately recall the defaulter declaration, Lotus claimed the term ‘defaulter’ had caused reputation loss to the company and also impaired its ability to raise loans or funds to operate its business.

According to NSEL trade and settlement data on August 12, there is no margin receivable from Lotus Refineries, while a fixed deposit of Rs 7.5 lakh was provided to the exchange.

Also, according to the stock position published by NSEL on its Web site, the exchange is holding 44,586 tonnes of RBD palm oil stock belonging to client Lotus Refineries.

In a release, Lotus also told NSEL that it is willing to settle its alleged obligations, if any, provided the serious disputes and claims raised by the exchange are resolved.
Our Bureau Mumbai, Aug. 31, 2013:
(This article was published on August 31, 2013)

After Borrowers, Brokers who pushed Ponzi scheme of Jignesh Shah promoted scam-ridden NSEL to come under probe ambit

The very first statement that Finance Minister P Chidambaram made on the Rs. 5600 crore NSEL payment crisis that later took shape of a full-fledged scam was that “investors knew that NSEL was unregulated, and they went with their eyes open”. That doesn’t seem to be the case as many of small investors are not only victims of NSEL but real victims of mis-selling by Brokers who were getting hefty commissions, as it has emerged in many cases.

Officials of EOW – Mumbai Police have already termed NSEL as not an exchange but a Ponzi Scheme

Investors who trusted and relied on their brokers to diversify their investments in commodity trading, in some cases, found that their intended investments in bullion landed up in wool. While it somewhere can be said to be a “bad decision” on part of the investors, but the brokers who were pushing them into NSEL’s ponzi schemes are more to blame. Many of these brokers would have made huge commissions when the going was good and do not stand to loose anything apart from their investors trust.

Ignorance is Bliss - Jignesh Shah proves the old dictum... as far as EOW is concerned.. Noone else buys the victim theory

The next leg of the probe will focus on such brokers and agents who found “gullible investors” to keep the ponzi scheme running. Brokers and Agents would surely have done their due diligence before recommending trading and financing on NSEL a safe bet with higher returns. Infact, the sacked and arrested CEO Anjani Sinha is understood to have claimed at EoW that many such big brokers with huge exposures at NSEL were directly dealing with Jignesh Shah and not him. Some of these brokers await payouts in hundreds of crores in behalf of their investor clients.

Being an unregulated market, it also offered a chance to brokers to make significantly higher returns than the regulated exchanges, sometimes even 100 times the margins they make in stock market purchases by their investors. A complete list of the beneficiary brokers and their agents is being prepared and scrutinized. After a few large defaulting borrowers join Nilesh Patel of NK Proteins, the heat may turn on to these brokers as Jignesh Shah feigns ignorance and continues to play the Victim card, that no one except EOW of Mumbai Police choses to buy.

NSEL crisis fallout: Multi Commodity Exchange CEO Javalgekar resigns

The Multi Commodity Exchange of India Ltd (MCX) said on Saturday its managing director and chief executive officer, Shreekant Javalgekar, had submitted his resignation from the company, in which Jignesh Shah-promoted Financial Technologies (India)(FTIL) holds a 26 per cent stake.

It did not specify a reason for the resignation in a statement.

Financial Technologies also owns National Spot Exchange Ltd (NSEL). The NSEL has been under investigation by police since last month after India's commodities regulator ordered it to suspend trading over suspected violations of rules on contract duration.

The MCX board will meet on Tuesday to discuss the appointment of a new CEO, its spokesman said.

Earlier, Jignesh Shah and Joseph Massey had also resigned from the board of MCX Stock Exchange. Shah was the vice chairman & shareholder director of MCX-SX, Massey was the MD & CEO of MCX-SX and also the shareholder director of MCX-SX Clearing Corporation.

In a fallout of the Rs 5,600-crore settlement crisis at the National Spot Exchange, the Economic Offences Wing of Mumbai Police on Thursday had arrested former managing director and chief executive Anjani Sinha.
Reuters : Mumbai, Sat Oct 19 2013, 16:35 hrs Small Large Print