Economic Offences Wing may soon begin assets valuation in the Rs 6000 crore NSEL scam

MUMBAI: The Economic Offences Wing (EOW) of Mumbai police, probing the NSEL scam, has requested the Maharashtra home department to appoint expert valuation and auction houses for auctioning the Rs 6,000-crore worth of assets it has secured from 24 defaulters and directors of the scam-hit bourse, a senior police official told ET.

"The proposals from various big auction houses have been submitted to the state home department at a recent meeting held with EOW officials," additional commissioner of police, EOW, Rajvardhan told ET. "The state government will shortly take a call on the appointments so that a process of valuation can begin."

Sinha, who will soon be promoted to the inspector-general rank and move on from EOW, is confident of 13,000 aggrieved investors on NSEL recovering funds worthRs 5,600 crore with the police having invoked provisions of the stringent Maharashtra Protection of Interest of Depositors (MPID) Act, 1999 to recover the same.

Before auctioning the assets, the state government has to notify them. Next, the MPID court, which is hearing the NSEL matter, will issue notices to the owners of the secured assets and pass an order for auctioning.

"More than 70 per cent of the Rs 6,000-crore worth of assets secured by EOW have already been notified by the state government, and the process for notifying the rest is under way," the police official said.

The outgoing cop’s comments came in the wake of a complaint by NSEL investor Ketan Shah to joint commissioner of police (crime) Atulchandra Kulkarni about alleged tardiness in the EOW investigation thus far.

"If you go by the various cases under MPID, you will find this is one of the cases in which the swiftest action has been taken. Ultimately, the Act (MPID) is for the benefit of the investors and we are trying to expedite the whole process (of recovery)," he added.

If any of the 24 defaulters wishes to voluntarily liquidate its assets to pay back the aggrieved investors, it would have to approach the MPID court, which can give them permission to sell the same under supervision of the EOW, in the interest of investor recovery. The fund disbursal would be monitored by the High Court Committee (HCC) appointed by Bombay High Court last year to act as receiver under its supervision.

FTIL, the promoter of NSEL, on Tuesday submitted to the BSE excerpts of its settlement proposal made to the central government on March 13. The proposal, first reported by ETin its March 19 edition, caused the FTIL stock to close up 13 per cent at Rs 191.75 on Tuesday. It envisages FTIL and NSEL brokers contributing Rs 500 crore each to meet the claims, either fully or in part, of 94 per cent of NSEL investors.

FTIL cited privity of contract with clients and of earnings made through brokerage and NBFC lending among reasons for roping brokers into the proposal. However, the BSE Brokers Forum, ANMI and CPAI opposed the proposal, saying, "It is preposterous to assume that when the defaulting members and NSEL are the sole and principal beneficiaries of the scam, the question of brokers entering into any settlement discussion does not arise." The finance ministry is yet to respond to the FTIL settlement offer.