A statement issued by the finance ministry said the government had held several review meetings to monitor the actions being taken by the investigating and enforcement agencies in the payment crisis, which came to light in 2013. Recently, Enforcement directorate (ED) arrested the alleged kingpin of the scam Jignesh Shah, promoter of Financial Technologies India Ltd (FTIL), who has been remanded to judicial custody till August 1.”A designated judge of the City Civil Court and Additional Sessions Judge, Greater Bombay has been nominated to try various cases arising out of the NSEL payment crisis, in addition to the other assigned matters, by giving priority to NSEL related cases. Meanwhile, efforts are being made to set up an independent court to hear NSEL related cases on exclusive basis,” said a government release.The whole exercise is being spearheaded by the finance ministry’s Department of Economic Affairs (DEA) secretary Shaktikanta Das.
In order to expedite the whole process of bringing the defaulters to book, recovering the scam money through attachment and auction of assets and returning it to affected investors, the ministry has taken several measures to strengthen the economic offence wing (EOW) of the Mumbai Police.
The ministry said it was doing this through augmenting the number of designated courts under the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999 (MPID Act) and deployment of full time competent authorities for dealing exclusively with the NSEL work.
“The government of Maharashtra was requested to expedite these measures so that the defaulters could be brought to book quickly; money could be realised from the sale of attached assets and consequently be returned to investors of NSEL, who have suffered losses in the payment crisis,” said the ministry statement.
The ministry saud that the Maharashtra government had already begun work on auction the assets attached by EOW. It said 831 properties worth Rs 7,063 crore have been attached by EOW under MPID Act till now. Of these, attachment of 711 properties worth Rs 6,115 crore have been notified in the Gazette of the Maharashtra government.
“EOW was requested to expedite realisation of value of attached assets, as per the procedure, quickly,” said the release.
The state governments has also been asked to take action on about Rs18 crore of attached assets, lying in the accounts of competent authority and designated court so that it was swiftly refunded to NSEL investors.
The ministry statement provided information on the steps being taken by the state government, Enforcement Directorate (ED), Financial Intelligence Unit, Corporate Affairs Ministry (MCA) and Securities and Exchange Board of India (Sebi) to speed up the realisation of value of attached assets and refund of money to allegedly swindled investors.
Following its many review meetings, the government has advised MCA to hasten the merger of NSEL and FTIL, which has been stalled due to various reasons. At the same, Sebi was also asked to quickly complete the examination of the audit reports on the books of five brokers of the erstwhile Forward Markets Commission, whose names figure in the list of offenders received from EOW.
An affected investor, who spoke on condition of anonymity, said the biggest challenge would be the full realisation of value of attached assets. He said certain stocks of commodities were auctioned at ridiculous prices and could therefore could pose realisation challenge.