In India’s financial capital, they are calling it the case of strange flip-flops.
More than five years since the probe into the NSEL case began, many are trying to reinvent the clock. Joseph Massey, a former non executive director of the now-defunct commodities spot exchange, and some former employees of the company have been summoned by the economic offences wing of the Mumbai police for interrogation. The million dollar question uppermost on the minds of many is simple, revolving around a three letter word: Why?
The case is – actually – going nowhere. The recent dustup started soon after pressures went high from several quarters, including the Securities and Exchange Board of India (SEBI) and Serious Fraud Investigation Office (SFIO), against some of India’s top brokers for their alleged involvement in the Rs 5600-crore payment crisis.
Is there anything more that remains to be investigated? Many are – justifiably – asking what were the cops doing till date. There is little action against some of the top brokerage houses which were named as integral part in the scam. Worse, some of those have started spinning a different story to hoodwink the investigators and claiming their arrest could jeoparadise market operations. The big bucks question is: Are the brokerages above law?Lets not forget what the former head of Mumbai Police EOW, Rajyavardhan Sinha, recently told a business news channel: That a crucial report he and his team had prepared after a “detailed and comprehensive” investigation into the scam gathered dust for many years. The report surfaced last month after SEBI attached it along with a report to the brokerages, asking them why action should not be taken against them, and more importantly, why they should not be declared “not fit and proper”. Has anyone asked in Mumbai, or in Delhi, why did the report gather dust? Wasn’t it the job of Ramesh Abhishek, the then head of forwards markets commission (FMC), to act immediately on the report? Why did he chose to remain silent. Abhishek, now secretary, department Of industrial policy & promotion, has offered no answer. Worse, the FMC has been merged with SEBI in September, 2015, no one will dig up files, and check notes to seek the truth.
Lets revert to Massey. First, it needs to be mentioned that Massey is made a witness in its charge-sheet by CBI. And now, its important to read through the lines in his application to the court seeking anticipatory bail. He was a non-executive director of NSEL from May 2005 through October 2013 and not involved in the day-to-day affairs of NSEL, drew no remuneration or sitting fee from the exchange. He has – this is important – visited the office of the EOW more than 50 times (after the scam surfaced in July 2013 and an FIR was registered). The EOW has found no reason to arrest Massey in the present case for the past six years. It adds that the applicant has cooperated with all the agencies, including CBI, which also has not (found) any overt act on the part of Massey. And if this is not enough, there is a Bombay HC order of August 2014, which said that NSEL was not a recipient of the proceeds of crime, which has been traced to the 17 defaulters. Hence, the liability for recovery rests with these defaulters.
Investigations into scams in Indian markets have rarely reached its logical conclusions. The big buck Harshad Mehta case ended in a whimper, no one could prove anything. The Sahara-SEBI case is still in a limbo, the Supreme Court has even returned the high value Amby Valley to the Lucknow-based conglomerate. NSE chairman Ashok Chawla has resigned and will now be prosecuted by the Central Bureau of Investigation (CBI) and the IL&FS case has brought heaps of shame and scandals on the way the markets work in India, and the way corrupt bureaucrats have their way without any tensions and make tons of illegal cash.
And stuck in the middle is the NSEL case where it has been logically, conclusively and emotionally proved that a handful of top brokerages messed the show and sold products by making huge promises ranging from unrealistic interests and foreign tours. Still, five years later, the EOW says the case is wide open and arrests happen only from the offices of NSEL. And this is especially when all the agencies, Central Bureau of Investigation (CBI), Enforcement Directorate (ED) and EOW-Mumbai police, have already filed their charge-sheets.
Its time to wrap the case, net the big fish and recover the cash. Only then the dust will settle on this long, pending case.
DISCLAIMER : Views expressed above are the author’s own.
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