Mumbai: The economic offences wing 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 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 PTI this evening.
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.
Police sources said they did not freeze the escrow account as it was opened for the specific purpose of making payouts to investors and brokers. The troubled exchange owes Rs 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.
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.
The EOW has charged NSEL promoters, directors and defaulters with cheating, forgery, breach of trust and criminal conspiracy, among others.
Police teams, which started raids at as many as 184 locations yesterday morning, completed searches at 54 sites and claimed to have collected crucial evidence.
"The raids at remaining locations are under way. It is a very tedious task and would take a few days to complete the searches," Sinha said.
Eight warehouses were sealed, Sinha said, adding, "Some commodities were found in a few of the warehouses."
Places raided include the house and office of Nimish K Patel, Chairman of NK Proteins - a key debtor of NSEL - in Ahmedabad, another officer said.
Throwing light on the line of investigation, Sinha added, "Our priority now is to confiscate all accounts books and secure the available stocks in various warehouses to safeguard interests of the investors. At the same time, we are studying money trail to establish how and where the money had gone. Making arrests at this stage is not required."
However, he added that "if we feel any accused is not co-operating, then we will arrest him/her."
The collation of information and data would take a few more days, after which they would thoroughly examine the material available, Sinha said.