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NSEL scam of Rs8000 crore backed by UPA

Mumbai, Aug 17 () : NSEL (National Spot Exchange Ltd) would be hauled to the High Court seeking a probe under its control. Somaiya President of investors’ grievance forum and the national secretary of the BJP said they would ask court to appoint auditors and take steps to sell NSEL promoter FT and MCX assets to repay the farmers and action on the brokers who lured investors by giving false claims of high returns. Somaiya says the investors lost faith in FMC (Forward markets commission), the regulator of NSEL and the Ministry.

He said FT and MCX managed to get permission from UPA to get an exemption to launch forward product in spite of being spot exchange. This led broking firms to sell fake products and then create bogus stocks on NSEL to get money at 16%. This money is used for speculation activities. He said that they indulged in badla system which is illegal.

NSEL and MCX used the Harshad Mehta route by using warehouse receipts to get bank receipts that were forged. There were no stocks in the warehouse. This scam started in 2010 with the knowledge of Consumer Affairs Ministry and FMC turning a blind eye.

Around Rs 8000 crores cash was generated. In 2011, the Ministry and FMC were informed and investigations confirmed in 2012 but the report was kept pending till the scam reached Rs 8000 crores in August 2013, said Somaiya.

Yesterday, FMC has ordered the exchange books be subjected to forensic audit. It has asked NSEL to reduce the 30 month time to clear dues. Since the exchange has gone back on the word to FMC it has asked to draw a new plan to clear dues.

FMC had also asked the Central Warehousing Corporation to give a report on the exchange stocks in warehouses. Rs 1219,71 crore owed by two investors has not been intimated to the exchange as to when it will come in, said FMC.

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