NSEL scam: Court summons promoters and directors in ₹5,600 scam, questions selective investigation

Nine years after investors were duped in a ₹5,600 crore scam involving the National Spot Exchange Ltd. (NSEL), a special court has summoned promoters and directors of NSEL's brokerage companies who had not been named in 11 chargesheets in the case, following a plea by an investor.

A similar plea was also made by NSEL. The investor, Arvind Bahl, had invested over ₹22 lakhs in NSEL through its brokerage company and clearing member Infoline Commodities Pvt. Ltd. The brokerage company had promised handsome returns on the investment, but he suffered huge losses due to NSEL's payment crisis. Bahl said he was a victim of the broker who had misrepresented that NSEL is risk-free.

While one director of the company was named as an accused, along with some directors of other such brokerage companies, Bahl stated that several directors and promoters of brokerage companies had not been chargesheeted despite their active involvement. He alleged that the EOW's investigating officer had shown a "pick and choose" policy. The investor said such selective investigation raises serious questions about the integrity of the EOW and betrays the faith of victims.

The court noted, while taking cognizance of offenses against the newly added accused persons, that the matter pertains to an economic offense of a huge magnitude of ₹5,600 crores, and several gullible investors like Bahl are still awaiting justice. It added that such selective investigation and final report raises serious questions about the impartial investigation of the Economic Offences Wing (EOW) and betrays the faith of victims. Special Judge AS Sayyad, designated under the Maharashtra Protection of Interest of Depositors (MPID) Act, said in the order that the responsible persons for the wrongdoings should not be allowed to escape the process of law.

The court's order stated that the scope and object of the MPID Act is only to protect the welfare and interest of the investors and depositors. Judge Sayyad further stated that upon examining the facts placed before the court, it finds substance in them and "cannot shut its eyes" over it as the amount involved belongs to investors and depositors. The order stated that appropriate action is warranted against the responsible persons.

The court said that the material prima facie shows that the persons at the relevant time appear to be in charge and control of the business of the accused broker companies, and therefore cognizance needs to be taken.

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