NSEL scam: Consumer affairs, finance ministry asked to file affidavit

Observing that the National Spot Exchange Ltd (NSEL) scam is a serious issue, the Bombay High Court on Thursday directed the Ministry of Consumer Affairs, Finance Ministry and Forward Market Commission (FMC) to file their affidavits in reply to a PIL seeking CBI probe in it.

PTI| Updated: Oct 10, 2013, 17:38 PM IST

Mumbai: Observing that the National Spot Exchange Ltd (NSEL) scam is a serious issue, the Bombay High Court on Thursday directed the Ministry of Consumer Affairs, Finance Ministry and Forward Market Commission (FMC) to file their affidavits in reply to a PIL seeking CBI probe in it.

The PIL, filed by Kirit Somaiya, president of the Investors Grievances Forum and former BJP MP, sought the High Court to order a probe by CBI or any other agency into the alleged refusal to pay dues to 17,000 small investors by NSEL resulting in a scam to the tune of over Rs 5,600 crore.

The court had on the last hearing directed all the respondents including Central Board of Direct Tax, NSEL and its promoter Jignesh Shah to file their reply affidavits.

However, today when the matter came up before a division bench headed by Justice S J Vazifdar, the respondents sought more time to file their affidavits.

Irked with this, the court said that it was a serious issue affecting several persons and directed the affidavits to be filed by October 21. The court said this was the last chance granted to the respondents and no further time would be granted.

About the scam, the PIL said that NSEL's role was to bring farmers and buyers together by eliminating middlemen. It alleged that NSEL had forged/manipulated documents regarding stock and liquidity and allowed fraudulent companies to pledge the same stock with more than one financial institution.

The PIL pleaded for a probe by CBI or Economic Offences Wing of Mumbai Police or Central Vigilance Commission into the alleged scam and demanded action against NSEL and its promoters and 24 companies which it said had disappeared along with Rs 8,000 crores.

The PIL also urged the court to direct Ministries of Finance and Consumer Affairs, Forward Market Commission, Central Vigilance Commission and EOW of Mumbai Police to take action against NSEL and its promoters for allegedly cheating investors.

The EOW recently lodged FIR in the case and arrested NSEL's vice chairman Amit Mukherjee.