EOW to contest former NSEL Director Massey’s anticipatory bail plea at MPID court

Mumbai, Jan 21 (IANS) The Economic Offences Wing (EOW) of the Mumbai Police would contest the anticipatory bail application filed by Joseph Massey, Former NSEL Director, in a special MPID (Maharashtra Protection of Interest of Depositors Act) court on Tuesday in connection with the Rs 5,600-crore NSEL payment default.

Massey had approached the special MPID court last week to seek anticipatory bail, after the EOW summoned him for interrogation of his alleged role in the NSEL payment crisis.

In a statement, the National Spot Exchange Limited (NSEL) confirmed that Massey has applied for anticipatory bail and said, "He has tremendous faith in Indian judiciary."

The EOW wants to interrogate Massey as it has got fresh documents and evidences in the ongoing investigation.

Recently, Mumbai Police arrested former NSEL Chief Financial Officer Shashidhar Kotian, who has been remanded to police custody, by a court till January 28.

NSEL, however, said Massey and some former employees are being targeted by the Mumbai Police.

Terming the EOW's move as 'highly motivated', NSEL said: "This is especially when all the agencies, Central Bureau of Investigation, Enforcement Directorate and EOW-Mumbai Police, have already filed their charge-sheets on NSEL and 63 moons. It is also to be noted that Massey is made a witness in its charge-sheet by CBI."

Disappointed by the EOW action, the defunct exchange said the scam had been traced to the 17 defaulters "and the entire liability for recovery rests with these defaulters" and a statement pertaining to the same has also been made by former Minister of State for Finance Arjun Ram Meghwal on the floor of Parliament.

According to NSEL, despite these glaring facts, traders and traders' forums, which are actually fronts for the brokers, have been completely misguiding the probe agencies since last five years and this entire action is being directed by brokers.

NSEL also stated: "The action from EOW is nothing but an attempt under pressure exerted by the brokers to divert attention away from them who are presently feeling the heat of prosecution by Securities and Exchange Board of India (SEBI) and various investigating agencies.

"SEBI has issued show cause notice to these brokers under the SEBI (Intermediaries) Regulations, 2008. Based on the same, the EOW has filed a FIR against these brokers/members on September 28, 2018, in relation to the transactions which they had entered into on NSEL platform. Also, the SFIO has in its report identified the misdeeds of the brokers and has recommended harsh action such as declaring the culpable brokers 'not fit and proper' to SEBI."

In its investigation, as per NSEL, the SEBI has found many violations by these brokers/members like mis-selling of products, KYC manipulations, client code modifications and infusion of black money and benami funds through their respective Non-Banking Financial Companies on NSEL.

NSEL said 63 moons group, formerly known as FTIL, along with NSEL has extended full support to EOW for tracking defaulters' assets and recovery, providing software support and server backup at the EOW office for tracking these assets.

"As a result, the EOW has already frozen over Rs 8,500 crore worth of assets of defaulters. NSEL has on its own managed to achieve decrees and awards worth Rs 4,100 crore of defaulter assets through the legitimate legal system," it added.

Notably, on December 27, 2018, the EOW filed charge sheets against 63 entities, including 27 individuals and 36 companies. Recently, on January 15, the Ministry of Corporate Affairs directed the Serious Fraud Investigation Office (SFIO) to prosecute all those involved in the NSEL scam and recommended strict action by SEBI against brokers, including declaring them 'not fit and proper'.