The matter relating to violations of law, criminal offences and default in payments to investors on the platform of National Spot Exchange Limited (NSEL) is engaging the serious attention of the Government. Investigations and other enforcement measures are being taken by the Economic Offences Wing (EOW) of Mumbai Police, Enforcement Directorate (ED), Securities and Exchange Board of India (SEBI), Financial Intelligence Unit – India (FIU-IND) and Ministry of Corporate Affairs (MCA). The progress of these activities is being monitored in the Department of Economic Affairs (DEA),Ministry of Finance through Review Meetings. So far, eleven such meetings have taken place. The last such Review Meeting was held on 6.6.2016 under the Chairmanship of Shri Shaktikanta Das, Secretary (Economic Affairs),Ministry of Finance.

The latest status with regard to some of the important aspects of the case and the key decisions taken in the Review Meeting are as under:

• Government of Maharashtra has issued fifth Gazette notification on 17.3.2016 for attachment of 151 properties worth ₹ 358.46 Crores approximately. Till date, five Gazette notifications have been issued in respect of attachment of assets worth ₹ 6115.25 Crores approximately.
• MCA is working on the merger / amalgamation of NSEL with Financial Technologies (India) Limited (FTIL). Bombay High Court had granted extension of time up to 15.02.2016 to MCA for taking final view on the draft order of the amalgamation. MCA issued the final Order on 12.2.2016 for the merger of NSEL with FTIL. Hon’ble Bombay High Court, however, has restrained the Government from notifying the final Order dated 12.02.2016 in the Gazette. In the review meeting, MCA was requested to take quick action and ensure that the case is handled on priority. Further, it was advised that a senior officer should visit Mumbai to follow up on the Court case.
• The Enforcement Directorate had filed a prosecution complaint before the City Civil Court And Additional Sessions Judge, Greater Bombay on 30.3.2015 against NSEL and 67 other accused persons under the Prevention of Money Laundering Act, 2002 (PMLA). The prosecution complaint details money trail amounting to ₹ 3721.22 crores. The next date of hearing is on 7.7.2016. It was pointed out to the Directorate that the violation of PMLA is a serious offence and therefore, the Directorate should be more proactive and take effective action quickly.
• FIU-IND passed an Order on 4.11.2015 under section 13 of the PMLA imposing a penalty of ₹ 1.66 crores on the NSEL for non-compliance of the Act. NSEL has gone in appeal in the PMLA Tribunal against the Order passed by Director, FIU-IND. Besides this, Show Cause Notices have been issued to officials / Directors concerned of NSEL. FIU-IND was advised that all out efforts may be made to ensure realisation of the penalty at the earliest.
• As decided in the previous review meeting, Government of Maharashtra is working on proposals for providing additional manpower for Economic Offence Wing of Mumbai Police which is investigating the NSEL case on an urgent basis; augmenting the number of Designated Courts under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999; and deployment of full time competent authorities for dealing exclusively with NSEL related work.
• Action has been initiated by the Government of Maharashtra to auction attached properties. The State Government was advised that it may closely monitor the progress of the investigation / prosecution by the EOW, Mumbai Police with a view to expediting the refund of the lost investment of public. The auction of attached properties needs to be expedited and the money realised may be returned to the investors at the earliest following the due procedure.
• SEBI has appointed empanelled auditors to conduct detailed inspection of books of five brokers of the erstwhile Forward Markets Commission whose names figure in the list of offenders received from EOW, Mumbai Police. SEBI was asked to get the audit of the books of brokers carried out in a comprehensive manner and expedite necessary action under law.

Money laundering enforcement prompting prosecutions, asset attachment and expedited auctions to recover funds for investor restitution. Enforcement and recovery measures address alleged offences and payment defaults at NSEL through anti money laundering prosecutions, administrative penalties and show cause notices, and multiple asset attachments and auctions to realize proceeds for investor restitution. Parallel regulatory actions include merger proceedings subject to court restraint, directed inspections of broker books, proposals to augment investigative and judicial resources, and an emphasis on interagency coordination to expedite penalty recovery and refund of investors following due procedure.