NSEL scam: Mumbai police make second arrest
Mumbai: The Mumbai Police on Thursday made a second arrest in the Rs 5,600-crore National Spot Exchange (NSEL) scam by taking into custody Jay Bahukhundi who was an assistant vice-president with the crippled spot exchange.
"Jay Bahukhundi, a former assistant vice-president and in-charge of know your customer (KYC) department that is tasked with verification of borrowing companies and investors etc at NSEL, was arrested today," said Additional Police Commissioner, Economic Offences Wing, Rajvardhan Sinha.
Yesterday, the EOW arrested Amit Mukherjee, another assistant vice-president of the exchange. It was the first arrest in the scam that came to light in July.
Mukherjee was remanded in police custody till October 18 by a local court today.
According to police sources, Mukherjee, during the interrogation, put the blame squarely on Bahukhundi, alleging that it was the latter's responsibility to carry out background checks and verfication of authenticity of various companies, their directors and existence of warehouses, etc.
"Also, networth of various companies is wrongly shown in the books of accounts of NSEL. Bahukhundi's wrong deeds are one of the reasons for the entire mess," said another officer.
According to police, the borrowers had been diverting funds to other businesses, including real estate, but neither Mukherjee nor Bahukhundi brought that to the management's notice.
The officer said "the two even did not inform about the non-availability of stock or pledging of stock with other lenders and simply allowed borrowers to siphon off funds." The investigators have also found that the borrowers didn't have physical control of stock against which money was borrowed.
The probe has also found some peculiar entries made on August 8 and 9 in the NSEL accounts related to its outstanding amounts, which is not matching with the books of accounts of the borrowers.
"Hence, the financial accountant of the exchange was questioned today in this regard," the officer added.
NSEL has alleged Mukherjee received kickbacks from various companies, including Mohan India, one of the largest borrowers from the exchange.
According to sources, Rs 50 crore was allegedly taken by Mukherjee as kickbacks from Mohan India.
To a query, Sinha said EOW so far had not come across anything that indicated that evidence was tampered with.
"We have been sharing information with Forward Market Commission, Enforcement Directorate, CBI and Income Tax Department," Sinha added.
Sources said investigators are compiling a list of the assets of borrower companies as part of the probe.
Meanwhile, state-run Metals & Minerals Trading Corporation (MMTC) was found to be one of the victims of the scam as it had invested about Rs 200 crore in NSEL without prior permission from its Board.
On Wednesday, NSEL group entity MCX-SX founder Jignesh Shah and Managing Director Joseph Massey quit the company's Board. The trouble for Shah started in July when NSEL defaulted on payout of Rs 5,600 crore to its investors.